TORTS AND

DAMAGES
Full Text Cases

UNIVERSITY OF SANTO TOMAS - LEGAZPI

COLLEGE OF LAW
PEÑARANDA CAMPUS, LEGAZPI CITY

0
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 124354 December 29, 1999
ROGELIO E. RAMOS and ERLINDA RAMOS, in
their own behalf and as natural guardians of the
minors, ROMMEL RAMOS, ROY RODERICK
RAMOS and RON RAYMOND RAMOS, petitioners,
vs.
COURT OF APPEALS, DELOS SANTOS MEDICAL
CENTER, DR. ORLINO HOSAKA and DRA.
PERFECTA GUTIERREZ, respondents.
KAPUNAN, J.:
The Hippocratic Oath mandates physicians to give
primordial consideration to the health and welfare of
their patients. If a doctor fails to live up to this precept,
he is made accountable for his acts. A mistake,
through gross negligence or incompetence or plain
human error, may spell the difference between life
and death. In this sense, the doctor plays God on his
patient's fate. 1
In the case at bar, the Court is called upon to rule
whether a surgeon, an anesthesiologist and a
hospital should be made liable for the unfortunate
comatose condition of a patient scheduled for
cholecystectomy. 2
Petitioners seek the reversal of the decision 3 of the
Court of Appeals, dated 29 May 1995, which
overturned the decision 4 of the Regional Trial Court,
dated 30 January 1992, finding private respondents
liable for damages arising from negligence in the
performance of their professional duties towards
petitioner Erlinda Ramos resulting in her comatose
condition.
The antecedent facts as summarized by the trial
court are reproduced hereunder:
Plaintiff Erlinda Ramos was, until the
afternoon of June 17, 1985, a 47-year old
(Exh. "A") robust woman (TSN, October 19,
1989, p. 10). Except for occasional
complaints of discomfort due to pains
allegedly caused by the presence of a stone
in her gall bladder (TSN, January 13, 1988,
pp. 4-5), she was as normal as any other
woman. Married to Rogelio E. Ramos, an
executive of Philippine Long Distance
Telephone Company, she has three children
whose names are Rommel Ramos, Roy
Roderick Ramos and Ron Raymond Ramos
(TSN, October 19, 1989, pp. 5-6).
Because the discomforts somehow
interfered with her normal ways, she sought
professional advice. She was advised to
undergo an operation for the removal of a
stone in her gall bladder (TSN, January 13,
1988, p. 5). She underwent a series of
examinations which included blood and urine
tests (Exhs. "A" and "C") which indicated she
was fit for surgery.
Through the intercession of a mutual friend,
Dr. Buenviaje (TSN, January 13, 1988, p. 7),
she and her husband Rogelio met for the first
time Dr. Orlino Hozaka (should be
Hosaka; see TSN, February 20, 1990, p. 3),
one of the defendants in this case, on June
10, 1985. They agreed that their date at the
operating table at the DLSMC (another
defendant), would be on June 17, 1985 at
9:00 A.M.. Dr. Hosaka decided that she
should undergo a "cholecystectomy"
operation after examining the documents
(findings from the Capitol Medical Center,
FEU Hospital and DLSMC) presented to him.
Rogelio E. Ramos, however, asked Dr.
Hosaka to look for a good anesthesiologist.
Dr. Hosaka, in turn, assured Rogelio that he
will get a good anesthesiologist. Dr. Hosaka
charged a fee of P16,000.00, which was to
include the anesthesiologist's fee and which
was to be paid after the operation (TSN,
October 19, 1989, pp. 14-15, 22-23, 31-33;
TSN, February 27, 1990, p. 13; and TSN,
November 9, 1989, pp. 3-4, 10, 17).
A day before the scheduled date of
operation, she was admitted at one of the
rooms of the DLSMC, located along E.
Rodriguez Avenue, Quezon City (TSN,
October 19,1989, p. 11).
At around 7:30 A.M. of June 17, 1985 and
while still in her room, she was prepared for
the operation by the hospital staff. Her sister-
in-law, Herminda Cruz, who was the Dean of
the College of Nursing at the Capitol Medical
Center, was also there for moral support.
She reiterated her previous request for
Herminda to be with her even during the
operation. After praying, she was given
injections. Her hands were held by Herminda
as they went down from her room to the
operating room (TSN, January 13, 1988, pp.
9-11). Her husband, Rogelio, was also with
her (TSN, October 19, 1989, p. 18). At the
operating room, Herminda saw about two or
three nurses and Dr. Perfecta Gutierrez, the
other defendant, who was to administer
anesthesia. Although not a member of the
hospital staff, Herminda introduced herself
as Dean of the College of Nursing at the
1
Capitol Medical Center who was to provide
moral support to the patient, to them.
Herminda was allowed to stay inside the
operating room.
At around 9:30 A.M., Dr. Gutierrez reached
a nearby phone to look for Dr. Hosaka who
was not yet in (TSN, January 13, 1988, pp.
11-12). Dr. Gutierrez thereafter informed
Herminda Cruz about the prospect of a delay
in the arrival of Dr. Hosaka. Herminda then
went back to the patient who asked, "Mindy,
wala pa ba ang Doctor"? The former replied,
"Huwag kang mag-alaala, darating na iyon"
(Ibid.).
Thereafter, Herminda went out of the
operating room and informed the patient's
husband, Rogelio, that the doctor was not
yet around (id., p. 13). When she returned to
the operating room, the patient told her,
"Mindy, inip na inip na ako, ikuha mo ako ng
ibang Doctor." So, she went out again and
told Rogelio about what the patient said (id.,
p. 15). Thereafter, she returned to the
operating room.
At around 10:00 A.M., Rogelio E. Ramos
was "already dying [and] waiting for the
arrival of the doctor" even as he did his best
to find somebody who will allow him to pull
out his wife from the operating room (TSN,
October 19, 1989, pp. 19-20). He also
thought of the feeling of his wife, who was
inside the operating room waiting for the
doctor to arrive (ibid.). At almost 12:00 noon,
he met Dr. Garcia who remarked that he (Dr.
Garcia) was also tired of waiting for Dr.
Hosaka to arrive (id., p. 21). While talking to
Dr. Garcia at around 12:10 P.M., he came to
know that Dr. Hosaka arrived as a nurse
remarked, "Nandiyan na si Dr. Hosaka,
dumating na raw." Upon hearing those
words, he went down to the lobby and waited
for the operation to be completed (id., pp. 16,
29-30).
At about 12:15 P.M., Herminda Cruz, who
was inside the operating room with the
patient, heard somebody say that "Dr.
Hosaka is already here." She then saw
people inside the operating room "moving,
doing this and that, [and] preparing the
patient for the operation" (TSN, January 13,
1988, p. 16). As she held the hand of Erlinda
Ramos, she then saw Dr. Gutierrez
intubating the hapless patient. She thereafter
heard Dr. Gutierrez say, "ang hirap ma-
intubate nito, mali yata ang pagkakapasok.
O lumalaki ang tiyan" (id., p. 17). Because of
the remarks of Dra. Gutierrez, she focused
her attention on what Dr. Gutierrez was
doing. She thereafter noticed bluish
discoloration of the nailbeds of the left hand
of the hapless Erlinda even as Dr. Hosaka
approached her. She then heard Dr. Hosaka
issue an order for someone to call Dr.
Calderon, another anesthesiologist (id., p.
19). After Dr. Calderon arrived at the
operating room, she saw this
anesthesiologist trying to intubate the
patient. The patient's nailbed became bluish
and the patient was placed in a
trendelenburg position — a position where
the head of the patient is placed in a position
lower than her feet which is an indication that
there is a decrease of blood supply to the
patient's brain (Id., pp. 19-20). Immediately
thereafter, she went out of the operating
room, and she told Rogelio E. Ramos "that
something wrong was . . . happening" (Ibid.).
Dr. Calderon was then able to intubate the
patient (TSN, July 25, 1991, p. 9).
Meanwhile, Rogelio, who was outside the
operating room, saw a respiratory machine
being rushed towards the door of the
operating room. He also saw several doctors
rushing towards the operating room. When
informed by Herminda Cruz that something
wrong was happening, he told her
(Herminda) to be back with the patient inside
the operating room (TSN, October 19, 1989,
pp. 25-28).
Herminda Cruz immediately rushed back,
and saw that the patient was still in
trendelenburg position (TSN, January 13,
1988, p. 20). At almost 3:00 P.M. of that
fateful day, she saw the patient taken to the
Intensive Care Unit (ICU).
About two days thereafter, Rogelio E.
Ramos was able to talk to Dr. Hosaka. The
latter informed the former that something
went wrong during the intubation. Reacting
to what was told to him, Rogelio reminded
the doctor that the condition of his wife would
not have happened, had he (Dr. Hosaka)
looked for a good anesthesiologist (TSN,
October 19, 1989, p. 31).
Doctors Gutierrez and Hosaka were also
asked by the hospital to explain what
happened to the patient. The doctors
explained that the patient had
bronchospasm (TSN, November 15, 1990,
pp. 26-27).
Erlinda Ramos stayed at the ICU for a
month. About four months thereafter or on
2
 November 15, 1985, the patient was
released from the hospital.
During the whole period of her confinement,
she incurred hospital bills amounting to
P93,542.25 which is the subject of a
promissory note and affidavit of undertaking
executed by Rogelio E. Ramos in favor of
DLSMC. Since that fateful afternoon of June
17, 1985, she has been in a comatose
condition. She cannot do anything. She
cannot move any part of her body. She
cannot see or hear. She is living on
mechanical means. She suffered brain
damage as a result of the absence of oxygen
in her brain for four to five minutes (TSN,
November 9, 1989, pp. 21-22). After being
discharged from the hospital, she has been
staying in their residence, still needing
constant medical attention, with her husband
Rogelio incurring a monthly expense ranging
from P8,000.00 to P10,000.00 (TSN,
October 19, 1989, pp. 32-34). She was also
diagnosed to be suffering from "diffuse
cerebral parenchymal damage" (Exh.
"G"; see also TSN, December 21, 1989,
p. 6). 5
Thus, on 8 January 1986, petitioners filed a civil
case 6 for damages with the Regional Trial Court of
Quezon City against herein private respondents
alleging negligence in the management and care of
Erlinda Ramos.
During the trial, both parties presented evidence as
to the possible cause of Erlinda's injury. Plaintiff
presented the testimonies of Dean Herminda Cruz
and Dr. Mariano Gavino to prove that the sustained
by Erlinda was due to lack of oxygen in her brain
caused by the faulty management of her airway by
private respondents during the anesthesia phase. On
the other hand, private respondents primarily relied
on the expert testimony of Dr. Eduardo Jamora, a
pulmonologist, to the effect that the cause of brain
damage was Erlinda's allergic reaction to the
anesthetic agent, Thiopental Sodium (Pentothal).
After considering the evidence from both sides, the
Regional Trial Court rendered judgment in favor of
petitioners, to wit:
After evaluating the evidence as shown in
the finding of facts set forth earlier, and
applying the aforecited provisions of law and
jurisprudence to the case at bar, this Court
finds and so holds that defendants are liable
to plaintiffs for damages. The defendants
were guilty of, at the very least, negligence in
the performance of their duty to plaintiff-
patient Erlinda Ramos.
On the part of Dr. Perfecta Gutierrez, this
Court finds that she omitted to exercise
reasonable care in not only intubating the
patient, but also in not repeating the
administration of atropine (TSN, August 20,
1991, pp. 5-10), without due regard to the
fact that the patient was inside the operating
room for almost three (3) hours. For after she
committed a mistake in intubating [the]
patient, the patient's nailbed became bluish
and the patient, thereafter, was placed in
trendelenburg position, because of the
decrease of blood supply to the patient's
brain. The evidence further shows that the
hapless patient suffered brain damage
because of the absence of oxygen in her
(patient's) brain for approximately four to five
minutes which, in turn, caused the patient to
become comatose.
On the part of Dr. Orlino Hosaka, this Court
finds that he is liable for the acts of Dr.
Perfecta Gutierrez whom he had chosen to
administer anesthesia on the patient as part
of his obligation to provide the patient a good
anesthesiologist', and for arriving for the
scheduled operation almost three (3) hours
late.
On the part of DLSMC (the hospital), this
Court finds that it is liable for the acts of
negligence of the doctors in their "practice of
medicine" in the operating room. Moreover,
the hospital is liable for failing through its
responsible officials, to cancel the scheduled
operation after Dr. Hosaka inexcusably failed
to arrive on time.
In having held thus, this Court rejects the
defense raised by defendants that they have
acted with due care and prudence in
rendering medical services to plaintiff-
patient. For if the patient was properly
intubated as claimed by them, the patient
would not have become comatose. And, the
fact that another anesthesiologist was called
to try to intubate the patient after her (the
patient's) nailbed turned bluish, belie their
claim. Furthermore, the defendants should
have rescheduled the operation to a later
date. This, they should have done, if
defendants acted with due care and
prudence as the patient's case was an
elective, not an emergency case.
xxx xxx xxx
WHEREFORE, and in view of the foregoing,
judgment is rendered in favor of the plaintiffs
and against the defendants. Accordingly, the
latter are ordered to pay, jointly and
3
 severally, the former the following sums of
money, to wit:
1) the sum of P8,000.00 as actual
monthly expenses for the plaintiff
Erlinda Ramos reckoned from
November 15, 1985 or in the total
sum of P632,000.00 as of April 15,
1992, subject to its being updated;
2) the sum of P100,000.00 as
reasonable attorney's fees;
3) the sum of P800,000.00 by way of
moral damages and the further sum
of P200,000,00 by way of exemplary
damages; and,
4) the costs of the suit.
SO ORDERED. 7
Private respondents seasonably interposed an
appeal to the Court of Appeals. The appellate court
rendered a Decision, dated 29 May 1995, reversing
the findings of the trial court. The decretal portion of
the decision of the appellate court reads:
WHEREFORE, for the foregoing premises
the appealed decision is hereby
REVERSED, and the complaint below
against the appellants is hereby ordered
DISMISSED. The counterclaim of appellant
De Los Santos Medical Center is GRANTED
but only insofar as appellees are hereby
ordered to pay the unpaid hospital bills
amounting to P93,542.25, plus legal interest
for justice must be tempered with mercy.
SO ORDERED. 8
The decision of the Court of Appeals was received
on 9 June 1995 by petitioner Rogelio Ramos who
was mistakenly addressed as "Atty. Rogelio Ramos."
No copy of the decision, however, was sent nor
received by the Coronel Law Office, then counsel on
record of petitioners. Rogelio referred the decision of
the appellate court to a new lawyer, Atty. Ligsay, only
on 20 June 1995, or four (4) days before the
expiration of the reglementary period for filing a
motion for reconsideration. On the same day, Atty.
Ligsay, filed with the appellate court a motion for
extension of time to file a motion for reconsideration.
The motion for reconsideration was submitted on 4
July 1995. However, the appellate court denied the
motion for extension of time in its Resolution dated
25 July 1995. 9Meanwhile, petitioners engaged the
services of another counsel, Atty. Sillano, to replace
Atty. Ligsay. Atty. Sillano filed on 7 August 1995 a
motion to admit the motion for reconsideration
contending that the period to file the appropriate
pleading on the assailed decision had not yet
commenced to run as the Division Clerk of Court of
the Court of Appeals had not yet served a copy
thereof to the counsel on record. Despite this
explanation, the appellate court still denied the
motion to admit the motion for reconsideration of
petitioners in its Resolution, dated 29 March 1996,
primarily on the ground that the fifteen-day (15)
period for filing a motion for reconsideration had
already expired, to wit:
We said in our Resolution on July 25, 1995,
that the filing of a Motion for Reconsideration
cannot be extended; precisely, the Motion for
Extension (Rollo, p. 12) was denied. It is, on
the other hand, admitted in the latter Motion
that plaintiffs/appellees received a copy of
the decision as early as June 9, 1995.
Computation wise, the period to file a Motion
for Reconsideration expired on June 24. The
Motion for Reconsideration, in turn, was
received by the Court of Appeals already on
July 4, necessarily, the 15-day period
already passed. For that alone, the latter
should be denied.
Even assuming admissibility of the Motion
for the Reconsideration, but after
considering the Comment/Opposition, the
former, for lack of merit, is hereby DENIED.
SO ORDERED. 10
A copy of the above resolution was received by Atty.
Sillano on 11 April 1996. The next day, or on 12 April
1996, Atty. Sillano filed before this Court a motion for
extension of time to file the present petition
for certiorari under Rule 45. The Court granted the
motion for extension of time and gave petitioners
additional thirty (30) days after the expiration of the
fifteen-day (15) period counted from the receipt of the
resolution of the Court of Appeals within which to
submit the petition. The due date fell on 27 May 1996.
The petition was filed on 9 May 1996, well within the
extended period given by the Court.
Petitioners assail the decision of the Court of Appeals
on the following grounds:
I
IN PUTTING MUCH RELIANCE ON THE
TESTIMONIES OF RESPONDENTS DRA.
GUTIERREZ, DRA. CALDERON AND DR.
JAMORA;
II
4
 IN FINDING THAT THE NEGLIGENCE OF
THE RESPONDENTS DID NOT CAUSE
THE UNFORTUNATE COMATOSE
CONDITION OF PETITIONER ERLINDA
RAMOS;
III
IN NOT APPLYING THE DOCTRINE
OF RES IPSA LOQUITUR. 11
Before we discuss the merits of the case, we shall
first dispose of the procedural issue on the timeliness
of the petition in relation to the motion for
reconsideration filed by petitioners with the Court of
Appeals. In their
Comment, 12 private respondents contend that the
petition should not be given due course since the
motion for reconsideration of the petitioners on the
decision of the Court of Appeals was validly
dismissed by the appellate court for having been filed
beyond the reglementary period. We do not agree.
A careful review of the records reveals that the
reason behind the delay in filing the motion for
reconsideration is attributable to the fact that the
decision of the Court of Appeals was not sent to then
counsel on record of petitioners, the Coronel Law
Office. In fact, a copy of the decision of the appellate
court was instead sent to and received by petitioner
Rogelio Ramos on 9 June 1995 wherein he was
mistakenly addressed as Atty. Rogelio Ramos.
Based on the other communications received by
petitioner Rogelio Ramos, the appellate court
apparently mistook him for the counsel on record.
Thus, no copy of the decision of the counsel on
record. Petitioner, not being a lawyer and unaware of
the prescriptive period for filing a motion for
reconsideration, referred the same to a legal counsel
only on 20 June 1995.
It is elementary that when a party is represented by
counsel, all notices should be sent to the party's
lawyer at his given address. With a few exceptions,
notice to a litigant without notice to his counsel on
record is no notice at all. In the present case, since a
copy of the decision of the appellate court was not
sent to the counsel on record of petitioner, there can
be no sufficient notice to speak of. Hence, the delay
in the filing of the motion for reconsideration cannot
be taken against petitioner. Moreover, since the
Court of Appeals already issued a second
Resolution, dated 29 March 1996, which superseded
the earlier resolution issued on 25 July 1995, and
denied the motion for reconsideration of petitioner,
we believed that the receipt of the former should be
considered in determining the timeliness of the filing
of the present petition. Based on this, the petition
before us was submitted on time.
After resolving the foregoing procedural issue, we
shall now look into the merits of the case. For a more
logical presentation of the discussion we shall first
consider the issue on the applicability of the doctrine
of res ipsa loquitur to the instant case. Thereafter, the
first two assigned errors shall be tackled in relation to
the res ipsa loquitur doctrine.
Res ipsa loquitur is a Latin phrase which literally
means "the thing or the transaction speaks for itself."
The phrase "res ipsa loquitur'' is a maxim for the rule
that the fact of the occurrence of an injury, taken with
the surrounding circumstances, may permit an
inference or raise a presumption of negligence, or
make out a plaintiff's prima facie case, and present a
question of fact for defendant to meet with an
explanation. 13 Where the thing which caused the
injury complained of is shown to be under the
management of the defendant or his servants and
the accident is such as in ordinary course of things
does not happen if those who have its management
or control use proper care, it affords reasonable
evidence, in the absence of explanation by the
defendant, that the accident arose from or was
caused by the defendant's want of care. 14
The doctrine of res ipsa loquitur is simply a
recognition of the postulate that, as a matter of
common knowledge and experience, the very nature
of certain types of occurrences may justify an
inference of negligence on the part of the person who
controls the instrumentality causing the injury in the
absence of some explanation by the defendant who
is charged with negligence. 15 It is grounded in the
superior logic of ordinary human experience and on
the basis of such experience or common knowledge,
negligence may be deduced from the mere
occurrence of the accident itself. 16 Hence, res ipsa
loquitur is applied in conjunction with the doctrine of
common knowledge.
However, much has been said that res ipsa
loquitur is not a rule of substantive law and, as such,
does not create or constitute an independent or
separate ground of liability. 17 Instead, it is
considered as merely evidentiary or in the nature of
a procedural rule. 18 It is regarded as a mode of proof,
or a mere procedural of convenience since it
furnishes a substitute for, and relieves a plaintiff of,
the burden of producing specific proof of
negligence. 19 In other words, mere invocation and
application of the doctrine does not dispense with the
requirement of proof of negligence. It is simply a step
in the process of such proof, permitting the plaintiff to
present along with the proof of the accident, enough
of the attending circumstances to invoke the doctrine,
creating an inference or presumption of negligence,
and to thereby place on the defendant the burden of
going forward with the proof. 20 Still, before resort to
the doctrine may be allowed, the following requisites
must be satisfactorily shown:
5
 1. The accident is of a kind which ordinarily
does not occur in the absence of someone's
negligence;
2. It is caused by an instrumentality within the
exclusive control of the defendant or
defendants; and
3. The possibility of contributing conduct
which would make the plaintiff responsible is
eliminated. 21
In the above requisites, the fundamental element is
the "control of instrumentality" which caused the
damage. 22Such element of control must be shown to
be within the dominion of the defendant. In order to
have the benefit of the rule, a plaintiff, in addition to
proving injury or damage, must show a situation
where it is applicable, and must establish that the
essential elements of the doctrine were present in a
particular incident. 23
Medical malpractice 24 cases do not escape the
application of this doctrine. Thus, res ipsa
loquitur has been applied when the circumstances
attendant upon the harm are themselves of such a
character as to justify an inference of negligence as
the cause of that harm. 25 The application of res ipsa
loquitur in medical negligence cases presents a
question of law since it is a judicial function to
determine whether a certain set of circumstances
does, as a matter of law, permit a given inference. 26
Although generally, expert medical testimony is
relied upon in malpractice suits to prove that a
physician has done a negligent act or that he has
deviated from the standard medical procedure, when
the doctrine of res ipsa loquitur is availed by the
plaintiff, the need for expert medical testimony is
dispensed with because the injury itself provides the
proof of negligence. 27 The reason is that the general
rule on the necessity of expert testimony applies only
to such matters clearly within the domain of medical
science, and not to matters that are within the
common knowledge of mankind which may be
testified to by anyone familiar with the
facts. 28 Ordinarily, only physicians and surgeons of
skill and experience are competent to testify as to
whether a patient has been treated or operated upon
with a reasonable degree of skill and care. However,
testimony as to the statements and acts of physicians
and surgeons, external appearances, and manifest
conditions which are observable by any one may be
given by non-expert witnesses. 29 Hence, in cases
where the res ipsa loquitur is applicable, the court is
permitted to find a physician negligent upon proper
proof of injury to the patient, without the aid of expert
testimony, where the court from its fund of common
knowledge can determine the proper standard of
care. 30 Where common knowledge and experience
teach that a resulting injury would not have occurred
to the patient if due care had been exercised, an
inference of negligence may be drawn giving rise to
an application of the doctrine of res ipsa
loquitur without medical evidence, which is ordinarily
required to show not only what occurred but how and
why it occurred. 31 When the doctrine is appropriate,
all that the patient must do is prove a nexus between
the particular act or omission complained of and the
injury sustained while under the custody and
management of the defendant without need to
produce expert medical testimony to establish the
standard of care. Resort to res ipsa loquitur is
allowed because there is no other way, under usual
and ordinary conditions, by which the patient can
obtain redress for injury suffered by him.
Thus, courts of other jurisdictions have applied the
doctrine in the following situations: leaving of a
foreign object in the body of the patient after an
operation, 32 injuries sustained on a healthy part of
the body which was not under, or in the area, of
treatment, 33 removal of the wrong part of the body
when another part was intended, 34 knocking out a
tooth while a patient's jaw was under anesthetic for
the removal of his tonsils, 35 and loss of an eye while
the patient plaintiff was under the influence of
anesthetic, during or following an operation for
appendicitis, 36 among others.
Nevertheless, despite the fact that the scope of res
ipsa loquitur has been measurably enlarged, it does
not automatically apply to all cases of medical
negligence as to mechanically shift the burden of
proof to the defendant to show that he is not guilty of
the ascribed negligence. Res ipsa loquitur is not a
rigid or ordinary doctrine to be perfunctorily used but
a rule to be cautiously applied, depending upon the
circumstances of each case. It is generally restricted
to situations in malpractice cases where a layman is
able to say, as a matter of common knowledge and
observation, that the consequences of professional
care were not as such as would ordinarily have
followed if due care had been
exercised. 37 A distinction must be made between the
failure to secure results, and the occurrence of
something more unusual and not ordinarily found if
the service or treatment rendered followed the usual
procedure of those skilled in that particular practice.
It must be conceded that the doctrine of res ipsa
loquitur can have no application in a suit against a
physician or surgeon which involves the merits of a
diagnosis or of a scientific treatment. 38 The
physician or surgeon is not required at his peril to
explain why any particular diagnosis was not correct,
or why any particular scientific treatment did not
produce the desired result. 39 Thus, res ipsa
loquitur is not available in a malpractice suit if the
only showing is that the desired result of an operation
or treatment was not accomplished. 40The real
question, therefore, is whether or not in the process
of the operation any extraordinary incident or unusual
event outside of the routine performance occurred
6
which is beyond the regular scope of customary
professional activity in such operations, which, if
unexplained would themselves reasonably speak to
the average man as the negligent cause or causes of
the untoward consequence. 41 If there was such
extraneous interventions, the doctrine of res ipsa
loquitur may be utilized and the defendant is called
upon to explain the matter, by evidence of
exculpation, if he could. 42
We find the doctrine of res ipsa loquitur appropriate
in the case at bar. As will hereinafter be explained,
the damage sustained by Erlinda in her brain prior to
a scheduled gall bladder operation presents a case
for the application of res ipsa loquitur.
A case strikingly similar to the one before us is Voss
vs. Bridwell, 43 where the Kansas Supreme Court in
applying the res ipsa loquitur stated:
The plaintiff herein submitted himself for a
mastoid operation and delivered his person
over to the care, custody and control of his
physician who had complete and exclusive
control over him, but the operation was never
performed. At the time of submission he was
neurologically sound and physically fit in
mind and body, but he suffered irreparable
damage and injury rendering him
decerebrate and totally incapacitated. The
injury was one which does not ordinarily
occur in the process of a mastoid operation
or in the absence of negligence in the
administration of an anesthetic, and in the
use and employment of an endoctracheal
tube. Ordinarily a person being put under
anesthesia is not rendered decerebrate as a
consequence of administering such
anesthesia in the absence of negligence.
Upon these facts and under these
circumstances a layman would be able to
say, as a matter of common knowledge and
observation, that the consequences of
professional treatment were not as such as
would ordinarily have followed if due care
had been exercised.
Here the plaintiff could not have been guilty
of contributory negligence because he was
under the influence of anesthetics and
unconscious, and the circumstances are
such that the true explanation of event is
more accessible to the defendants than to
the plaintiff for they had the exclusive control
of the instrumentalities of anesthesia.
Upon all the facts, conditions and
circumstances alleged in Count II it is held
that a cause of action is stated under the
doctrine of res ipsa loquitur. 44
Indeed, the principles enunciated in the aforequoted
case apply with equal force here. In the present case,
Erlinda submitted herself for cholecystectomy and
expected a routine general surgery to be performed
on her gall bladder. On that fateful day she delivered
her person over to the care, custody and control of
private respondents who exercised complete and
exclusive control over her. At the time of submission,
Erlinda was neurologically sound and, except for a
few minor discomforts, was likewise physically fit in
mind and body. However, during the administration
of anesthesia and prior to the performance of
cholecystectomy she suffered irreparable damage to
her brain. Thus, without undergoing surgery, she
went out of the operating room already decerebrate
and totally incapacitated. Obviously, brain damage,
which Erlinda sustained, is an injury which does not
normally occur in the process of a gall bladder
operation. In fact, this kind of situation does not in the
absence of negligence of someone in the
administration of anesthesia and in the use of
endotracheal tube. Normally, a person being put
under anesthesia is not rendered decerebrate as a
consequence of administering such anesthesia if the
proper procedure was followed. Furthermore, the
instruments used in the administration of anesthesia,
including the endotracheal tube, were all under the
exclusive control of private respondents, who are the
physicians-in-charge. Likewise, petitioner Erlinda
could not have been guilty of contributory negligence
because she was under the influence of anesthetics
which rendered her unconscious.
Considering that a sound and unaffected member of
the body (the brain) is injured or destroyed while the
patient is unconscious and under the immediate and
exclusive control of the physicians, we hold that a
practical administration of justice dictates the
application of res ipsa loquitur. Upon these facts and
under these circumstances the Court would be able
to say, as a matter of common knowledge and
observation, if negligence attended the management
and care of the patient. Moreover, the liability of the
physicians and the hospital in this case is not
predicated upon an alleged failure to secure the
desired results of an operation nor on an alleged lack
of skill in the diagnosis or treatment as in fact no
operation or treatment was ever performed on
Erlinda. Thus, upon all these initial determination a
case is made out for the application of the doctrine
of res ipsa loquitur.
Nonetheless, in holding that res ipsa loquitur is
available to the present case we are not saying that
the doctrine is applicable in any and all cases where
injury occurs to a patient while under anesthesia, or
to any and all anesthesia cases. Each case must be
viewed in its own light and scrutinized in order to be
within the res ipsa loquitur coverage.
7
Having in mind the applicability of the res ipsa room right beside the patient when the tragic event
loquitur doctrine and the presumption of negligence occurred. Witness Cruz testified to this effect:
allowed therein, the Court now comes to the issue of
whether the Court of Appeals erred in finding that ATTY. PAJARES:
private respondents were not negligent in the care of
Erlinda during the anesthesia phase of the operation
Q: In particular, what did Dra. Perfecta
and, if in the affirmative, whether the alleged
Gutierrez do, if any on the patient?
negligence was the proximate cause of Erlinda's
comatose condition. Corollary thereto, we shall also
determine if the Court of Appeals erred in relying on A: In particular, I could see that she was
the testimonies of the witnesses for the private intubating the patient.
respondents.
Q: Do you know what happened to that
In sustaining the position of private respondents, the intubation process administered by Dra.
Court of Appeals relied on the testimonies of Dra. Gutierrez?
Gutierrez, Dra. Calderon and Dr. Jamora. In giving
weight to the testimony of Dra. Gutierrez, the Court ATTY. ALCERA:
of Appeals rationalized that she was candid enough
to admit that she experienced some difficulty in the She will be incompetent Your Honor.
endotracheal intubation 45 of the patient and thus,
cannot be said to be covering her negligence with COURT:
falsehood. The appellate court likewise opined that
private respondents were able to show that the brain
Witness may answer if she knows.
damage sustained by Erlinda was not caused by the
alleged faulty intubation but was due to the allergic
reaction of the patient to the drug Thiopental Sodium A: As have said, I was with the patient, I was
(Pentothal), a short-acting barbiturate, as testified on beside the stretcher holding the left hand of
by their expert witness, Dr. Jamora. On the other the patient and all of a sudden heard some
hand, the appellate court rejected the testimony of remarks coming from Dra. Perfecta
Dean Herminda Cruz offered in favor of petitioners Gutierrez herself. She was saying "Ang hirap
that the cause of the brain injury was traceable to the ma-intubate nito, mali yata ang
wrongful insertion of the tube since the latter, being a pagkakapasok. O lumalaki ang tiyan.
nurse, was allegedly not knowledgeable in the
process of intubation. In so holding, the appellate xxx xxx xxx
court returned a verdict in favor of respondents
physicians and hospital and absolved them of any ATTY. PAJARES:
liability towards Erlinda and her family.
Q: From whom did you hear those words
We disagree with the findings of the Court of "lumalaki ang tiyan"?
Appeals. We hold that private respondents were
unable to disprove the presumption of negligence on A: From Dra. Perfecta Gutierrez.
their part in the care of Erlinda and their negligence
was the proximate cause of her piteous condition.
xxx xxx xxx
In the instant case, the records are helpful in
furnishing not only the logical scientific evidence of Q: After hearing the phrase "lumalaki ang
the pathogenesis of the injury but also in providing tiyan," what did you notice on the person of
the Court the legal nexus upon which liability is the patient?
based. As will be shown hereinafter, private
respondents' own testimonies which are reflected in A: I notice (sic) some bluish discoloration on
the transcript of stenographic notes are replete of the nailbeds of the left hand where I was at.
signposts indicative of their negligence in the care
and management of Erlinda. Q: Where was Dr. Orlino Ho[s]aka then at
that particular time?
With regard to Dra. Gutierrez, we find her negligent
in the care of Erlinda during the anesthesia phase. A: I saw him approaching the patient during
As borne by the records, respondent Dra. Gutierrez that time.
failed to properly intubate the patient. This fact was
attested to by Prof. Herminda Cruz, Dean of the Q: When he approached the patient, what
Capitol Medical Center School of Nursing and did he do, if any?
petitioner's sister-in-law, who was in the operating

8
 A: He made an order to call on the
anesthesiologist in the person of Dr.
Calderon.
Q: Did Dr. Calderon, upon being called,
arrive inside the operating room?
A: Yes sir.
Q: What did [s]he do, if any?
A: [S]he tried to intubate the patient.
Q: What happened to the patient?
A: When Dr. Calderon try (sic) to intubate the
patient, after a while the patient's nailbed
became bluish and I saw the patient was
placed in trendelenburg position.
xxx xxx xxx
Q: Do you know the reason why the patient
was placed in that trendelenburg position?
A: As far as I know, when a patient is in that
position, there is a decrease of blood supply
to the brain. 46
xxx xxx xxx
The appellate court, however, disbelieved Dean
Cruz's testimony in the trial court by declaring that:
A perusal of the standard nursing curriculum
in our country will show that intubation is not
taught as part of nursing procedures and
techniques. Indeed, we take judicial notice of
the fact that nurses do not, and cannot,
intubate. Even on the assumption that she is
fully capable of determining whether or not a
patient is properly intubated, witness
Herminda Cruz, admittedly, did not peep into
the throat of the patient. (TSN, July 25, 1991,
p. 13). More importantly, there is no
evidence that she ever auscultated the
patient or that she conducted any type of
examination to check if the endotracheal
tube was in its proper place, and to
determine the condition of the heart, lungs,
and other organs. Thus, witness Cruz's
categorical statements that appellant Dra.
Gutierrez failed to intubate the appellee
Erlinda Ramos and that it was Dra. Calderon
who succeeded in doing so clearly suffer
from lack of sufficient factual bases. 47
In other words, what the Court of Appeals is trying to
impress is that being a nurse, and considered a
layman in the process of intubation, witness Cruz is
not competent to testify on whether or not the
intubation was a success.
We do not agree with the above reasoning of the
appellate court. Although witness Cruz is not an
anesthesiologist, she can very well testify upon
matters on which she is capable of observing such
as, the statements and acts of the physician and
surgeon, external appearances, and manifest
conditions which are observable by any one. 48 This
is precisely allowed under the doctrine of res ipsa
loquitur where the testimony of expert witnesses is
not required. It is the accepted rule that expert
testimony is not necessary for the proof of negligence
in non-technical matters or those of which an
ordinary person may be expected to have
knowledge, or where the lack of skill or want of care
is so obvious as to render expert testimony
unnecessary. 49 We take judicial notice of the fact
that anesthesia procedures have become so
common, that even an ordinary person can tell if it
was administered properly. As such, it would not be
too difficult to tell if the tube was properly inserted.
This kind of observation, we believe, does not require
a medical degree to be acceptable.
At any rate, without doubt, petitioner's witness, an
experienced clinical nurse whose long experience
and scholarship led to her appointment as Dean of
the Capitol Medical Center School at Nursing, was
fully capable of determining whether or not the
intubation was a success. She had extensive clinical
experience starting as a staff nurse in Chicago,
Illinois; staff nurse and clinical instructor in a teaching
hospital, the FEU-NRMF; Dean of the Laguna
College of Nursing in San Pablo City; and then Dean
of the Capitol Medical Center School of
Nursing. 50Reviewing witness Cruz' statements, we
find that the same were delivered in a straightforward
manner, with the kind of detail, clarity, consistency
and spontaneity which would have been difficult to
fabricate. With her clinical background as a nurse,
the Court is satisfied that she was able to
demonstrate through her testimony what truly
transpired on that fateful day.
Most of all, her testimony was affirmed by no less
than respondent Dra. Gutierrez who admitted that
she experienced difficulty in inserting the tube into
Erlinda's trachea, to wit:
ATTY. LIGSAY:
Q: In this particular case, Doctora, while you
were intubating at your first attempt (sic), you
did not immediately see the trachea?
DRA. GUTIERREZ:
A: Yes sir.
9
 Q: Did you pull away the tube immediately?
A: You do not pull the . . .
Q: Did you or did you not?
A: I did not pull the tube.
Q: When you said "mahirap yata ito," what
were you referring to?
A: "Mahirap yata itong i-intubate," that was
the patient.
Q: So, you found some difficulty in inserting
the tube?
A: Yes, because of (sic) my first attempt, I did
not see right away. 51
Curiously in the case at bar, respondent Dra.
Gutierrez made the haphazard defense that she
encountered hardship in the insertion of the tube in
the trachea of Erlinda because it was positioned
more anteriorly (slightly deviated from the normal
anatomy of a person) 52 making it harder to locate
and, since Erlinda is obese and has a short neck and
protruding teeth, it made intubation even more
difficult.
The argument does not convince us. If this was
indeed observed, private respondents adduced no
evidence demonstrating that they proceeded to make
a thorough assessment of Erlinda's airway, prior to
the induction of anesthesia, even if this would mean
postponing the procedure. From their testimonies, it
appears that the observation was made only as an
afterthought, as a means of defense.
The pre-operative evaluation of a patient prior to the
administration of anesthesia is universally observed
to lessen the possibility of anesthetic accidents. Pre-
operative evaluation and preparation for anesthesia
begins when the anesthesiologist reviews the
patient's medical records and visits with the patient,
traditionally, the day before elective surgery. 53 It
includes taking the patient's medical history, review
of current drug therapy, physical examination and
interpretation of laboratory data. 54 The physical
examination performed by the anesthesiologist is
directed primarily toward the central nervous system,
cardiovascular system, lungs and upper airway. 55 A
thorough analysis of the patient's airway normally
involves investigating the following: cervical spine
mobility, temporomandibular mobility, prominent
central incisors, diseased or artificial teeth, ability to
visualize uvula and the thyromental distance. 56Thus,
physical characteristics of the patient's upper airway
that could make tracheal intubation difficult should be
studied. 57 Where the need arises, as when initial
assessment indicates possible problems (such as
the alleged short neck and protruding teeth of
Erlinda) a thorough examination of the patient's
airway would go a long way towards decreasing
patient morbidity and mortality.
In the case at bar, respondent Dra. Gutierrez
admitted that she saw Erlinda for the first time on the
day of the operation itself, on 17 June 1985. Before
this date, no prior consultations with, or pre-operative
evaluation of Erlinda was done by her. Until the day
of the operation, respondent Dra. Gutierrez was
unaware of the physiological make-up and needs of
Erlinda. She was likewise not properly informed of
the possible difficulties she would face during the
administration of anesthesia to Erlinda. Respondent
Dra. Gutierrez' act of seeing her patient for the first
time only an hour before the scheduled operative
procedure was, therefore, an act of exceptional
negligence and professional irresponsibility. The
measures cautioning prudence and vigilance in
dealing with human lives lie at the core of the
physician's centuries-old Hippocratic Oath. Her
failure to follow this medical procedure is, therefore,
a clear indicia of her negligence.
Respondent Dra. Gutierrez, however, attempts to
gloss over this omission by playing around with the
trial court's ignorance of clinical procedure, hoping
that she could get away with it. Respondent Dra.
Gutierrez tried to muddle the difference between an
elective surgery and an emergency surgery just so
her failure to perform the required pre-operative
evaluation would escape unnoticed. In her testimony
she asserted:
ATTY. LIGSAY:
Q: Would you agree, Doctor, that it is good
medical practice to see the patient a day
before so you can introduce yourself to
establish good doctor-patient relationship
and gain the trust and confidence of the
patient?
DRA. GUTIERREZ:
A: As I said in my previous statement, it
depends on the operative procedure of the
anesthesiologist and in my case, with
elective cases and normal cardio-pulmonary
clearance like that, I usually don't do it except
on emergency and on cases that have an
abnormalities (sic). 58
However, the exact opposite is true. In an emergency
procedure, there is hardly enough time available for
the fastidious demands of pre-operative procedure
so that an anesthesiologist is able to see the patient
only a few minutes before surgery, if at all. Elective
procedures, on the other hand, are operative
10
procedures that can wait for days, weeks or even
months. Hence, in these cases, the anesthesiologist
possesses the luxury of time to be at the patient's
beside to do a proper interview and clinical
evaluation. There is ample time to explain the
method of anesthesia, the drugs to be used, and their
possible hazards for purposes of informed consent.
Usually, the pre-operative assessment is conducted
at least one day before the intended surgery, when
the patient is relaxed and cooperative.
Erlinda's case was elective and this was known to
respondent Dra. Gutierrez. Thus, she had all the time
to make a thorough evaluation of Erlinda's case prior
to the operation and prepare her for anesthesia.
However, she never saw the patient at the bedside.
She herself admitted that she had seen petitioner
only in the operating room, and only on the actual
date of the cholecystectomy. She negligently failed to
take advantage of this important opportunity. As
such, her attempt to exculpate herself must fail.
Having established that respondent Dra. Gutierrez
failed to perform pre-operative evaluation of the
patient which, in turn, resulted to a wrongful
intubation, we now determine if the faulty intubation
is truly the proximate cause of Erlinda's comatose
condition.
Private respondents repeatedly hammered the view
that the cerebral anoxia which led to Erlinda's coma
was due to bronchospasm 59 mediated by her allergic
response to the drug, Thiopental Sodium, introduced
into her system. Towards this end, they presented
Dr. Jamora, a Fellow of the Philippine College of
Physicians and Diplomate of the Philippine Specialty
Board of Internal Medicine, who advanced private
respondents' theory that the oxygen deprivation
which led to anoxic encephalopathy, 60 was due to an
unpredictable drug reaction to the short-acting
barbiturate. We find the theory of private respondents
unacceptable.
First of all, Dr. Jamora cannot be considered an
authority in the field of anesthesiology simply
because he is not an anesthesiologist. Since Dr.
Jamora is a pulmonologist, he could not have been
capable of properly enlightening the court about
anesthesia practice and procedure and their
complications. Dr. Jamora is likewise not an
allergologist and could not therefore properly
advance expert opinion on allergic-mediated
processes. Moreover, he is not a pharmacologist
and, as such, could not have been capable, as an
expert would, of explaining to the court the
pharmacologic and toxic effects of the supposed
culprit, Thiopental Sodium (Pentothal).
The inappropriateness and absurdity of accepting Dr.
Jamora's testimony as an expert witness in the
anesthetic practice of Pentothal administration is
further supported by his own admission that he
formulated his opinions on the drug not from the
practical experience gained by a specialist or expert
in the administration and use of Sodium Pentothal on
patients, but only from reading certain references, to
wit:
ATTY. LIGSAY:
Q: In your line of expertise on pulmonology,
did you have any occasion to use pentothal
as a method of management?
DR. JAMORA:
A: We do it in conjunction with the
anesthesiologist when they have to intubate
our patient.
Q: But not in particular when you practice
pulmonology?
A: No.
Q: In other words, your knowledge about
pentothal is based only on what you have
read from books and not by your own
personal application of the medicine
pentothal?
A: Based on my personal experience also on
pentothal.
Q: How many times have you used
pentothal?
A: They used it on me. I went into
bronchospasm during my appendectomy.
Q: And because they have used it on you
and on account of your own personal
experience you feel that you can testify on
pentothal here with medical authority?
A: No. That is why I used references to
support my claims. 61
An anesthetic accident caused by a rare drug-
induced bronchospasm properly falls within the fields
of anesthesia, internal medicine-allergy, and clinical
pharmacology. The resulting anoxic encephalopathy
belongs to the field of neurology. While admittedly,
many bronchospastic-mediated pulmonary diseases
are within the expertise of pulmonary medicine, Dr.
Jamora's field, the anesthetic drug-induced, allergic
mediated bronchospasm alleged in this case is within
the disciplines of anesthesiology, allergology and
pharmacology. On the basis of the foregoing
transcript, in which the pulmonologist himself
11
admitted that he could not testify about the drug with
medical authority, it is clear that the appellate court
erred in giving weight to Dr. Jamora's testimony as
an expert in the administration of Thiopental Sodium.
The provision in the rules of evidence 62 regarding
expert witnesses states:
Sec. 49. Opinion of expert witness. — The
opinion of a witness on a matter requiring
special knowledge, skill, experience or
training which he is shown to possess, may
be received in evidence.
Generally, to qualify as an expert witness, one must
have acquired special knowledge of the subject
matter about which he or she is to testify, either by
the study of recognized authorities on the subject or
by practical experience. 63Clearly, Dr. Jamora does
not qualify as an expert witness based on the above
standard since he lacks the necessary knowledge,
skill, and training in the field of anesthesiology.
Oddly, apart from submitting testimony from a
specialist in the wrong field, private respondents'
intentionally avoided providing testimony by
competent and independent experts in the proper
areas.
Moreover, private respondents' theory, that
Thiopental Sodium may have produced Erlinda's
coma by triggering an allergic mediated response,
has no support in evidence. No evidence of stridor,
skin reactions, or wheezing — some of the more
common accompanying signs of an allergic reaction
— appears on record. No laboratory data were ever
presented to the court.
In any case, private respondents themselves admit
that Thiopental induced, allergic-mediated
bronchospasm happens only very rarely. If courts
were to accept private respondents' hypothesis
without supporting medical proof, and against the
weight of available evidence, then every anesthetic
accident would be an act of God. Evidently, the
Thiopental-allergy theory vigorously asserted by
private respondents was a mere afterthought. Such
an explanation was advanced in order to advanced
in order to absolve them of any and all responsibility
for the patient's condition.
In view of the evidence at hand, we are inclined to
believe petitioners' stand that it was the faulty
intubation which was the proximate cause of
Erlinda's comatose condition.
Proximate cause has been defined as that which, in
natural and continuous sequence, unbroken by any
efficient intervening cause, produces injury, and
without which the result would not have
occurred. 64 An injury or damage is proximately
caused by an act or a failure to act, whenever it
appears from the evidence in the case, that the act
or omission played a substantial part in bringing
about or actually causing the injury or damage; and
that the injury or damage was either a direct result or
a reasonably probable consequence of the act or
omission. 65 It is the dominant, moving or producing
cause.
Applying the above definition in relation to the
evidence at hand, faulty intubation is undeniably the
proximate cause which triggered the chain of events
leading to Erlinda's brain damage and, ultimately, her
comatosed condition.
Private respondents themselves admitted in their
testimony that the first intubation was a failure. This
fact was likewise observed by witness Cruz when
she heard respondent Dra. Gutierrez remarked, "Ang
hirap ma-intubate nito, mali yata ang pagkakapasok.
O lumalaki ang tiyan." Thereafter, witness Cruz
noticed abdominal distention on the body of Erlinda.
The development of abdominal distention, together
with respiratory embarrassment indicates that the
endotracheal tube entered the esophagus instead of
the respiratory tree. In other words, instead of the
intended endotracheal intubation what actually took
place was an esophageal intubation. During
intubation, such distention indicates that air has
entered the gastrointestinal tract through the
esophagus instead of the lungs through the trachea.
Entry into the esophagus would certainly cause some
delay in oxygen delivery into the lungs as the tube
which carries oxygen is in the wrong place. That
abdominal distention had been observed during the
first intubation suggests that the length of time
utilized in inserting the endotracheal tube (up to the
time the tube was withdrawn for the second attempt)
was fairly significant. Due to the delay in the delivery
of oxygen in her lungs Erlinda showed signs of
cyanosis. 66 As stated in the testimony of Dr. Hosaka,
the lack of oxygen became apparent only after he
noticed that the nailbeds of Erlinda were already
blue. 67 However, private respondents contend that a
second intubation was executed on Erlinda and this
one was successfully done. We do not think so. No
evidence exists on record, beyond private
respondents' bare claims, which supports the
contention that the second intubation was
successful. Assuming that the endotracheal tube
finally found its way into the proper orifice of the
trachea, the same gave no guarantee of oxygen
delivery, the hallmark of a successful intubation. In
fact, cyanosis was again observed immediately after
the second intubation. Proceeding from this event
(cyanosis), it could not be claimed, as private
respondents insist, that the second intubation was
accomplished. Even granting that the tube was
successfully inserted during the second attempt, it
was obviously too late. As aptly explained by the trial
court, Erlinda already suffered brain damage as a
result of the inadequate oxygenation of her brain for
about four to five minutes. 68
12
The above conclusion is not without basis. Scientific
studies point out that intubation problems are
responsible for one-third (1/3) of deaths and serious
injuries associated with anesthesia. 69 Nevertheless,
ninety-eight percent (98%) or the vast majority of
difficult intubations may be anticipated by performing
a thorough evaluation of the patient's airway prior to
the operation. 70 As stated beforehand, respondent
Dra. Gutierrez failed to observe the proper pre-
operative protocol which could have prevented this
unfortunate incident. Had appropriate diligence and
reasonable care been used in the pre-operative
evaluation, respondent physician could have been
much more prepared to meet the contingency
brought about by the perceived anatomic variations
in the patient's neck and oral area, defects which
would have been easily overcome by a prior
knowledge of those variations together with a change
in technique. 71 In other words, an experienced
anesthesiologist, adequately alerted by a thorough
pre-operative evaluation, would have had little
difficulty going around the short neck and protruding
teeth. 72 Having failed to observe common medical
standards in pre-operative management and
intubation, respondent Dra. Gutierrez' negligence
resulted in cerebral anoxia and eventual coma of
Erlinda.
We now determine the responsibility of respondent
Dr. Orlino Hosaka as the head of the surgical team.
As the so-called "captain of the ship," 73 it is the
surgeon's responsibility to see to it that those under
him perform their task in the proper manner.
Respondent Dr. Hosaka's negligence can be found
in his failure to exercise the proper authority (as the
"captain" of the operative team) in not determining if
his anesthesiologist observed proper anesthesia
protocols. In fact, no evidence on record exists to
show that respondent Dr. Hosaka verified if
respondent Dra. Gutierrez properly intubated the
patient. Furthermore, it does not escape us that
respondent Dr. Hosaka had scheduled another
procedure in a different hospital at the same time as
Erlinda's cholecystectomy, and was in fact over three
hours late for the latter's operation. Because of this,
he had little or no time to confer with his
anesthesiologist regarding the anesthesia delivery.
This indicates that he was remiss in his professional
duties towards his patient. Thus, he shares equal
responsibility for the events which resulted in
Erlinda's condition.
We now discuss the responsibility of the hospital in
this particular incident. The unique practice (among
private hospitals) of filling up specialist staff with
attending and visiting "consultants," 74 who are
allegedly not hospital employees, presents problems
in apportioning responsibility for negligence in
medical malpractice cases. However, the difficulty is
only more apparent than real.
In the first place, hospitals exercise significant control
in the hiring and firing of consultants and in the
conduct of their work within the hospital premises.
Doctors who apply for "consultant" slots, visiting or
attending, are required to submit proof of completion
of residency, their educational qualifications;
generally, evidence of accreditation by the
appropriate board (diplomate), evidence of fellowship
in most cases, and references. These requirements
are carefully scrutinized by members of the hospital
administration or by a review committee set up by the
hospital who either accept or reject the
application. 75 This is particularly true with
respondent hospital.
After a physician is accepted, either as a visiting or
attending consultant, he is normally required to
attend clinico-pathological conferences, conduct
bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and
perform other tasks and responsibilities, for the
privilege of being able to maintain a clinic in the
hospital, and/or for the privilege of admitting patients
into the hospital. In addition to these, the physician's
performance as a specialist is generally evaluated by
a peer review committee on the basis of mortality and
morbidity statistics, and feedback from patients,
nurses, interns and residents. A consultant remiss in
his duties, or a consultant who regularly falls short of
the minimum standards acceptable to the hospital or
its peer review committee, is normally politely
terminated.
In other words, private hospitals, hire, fire and
exercise real control over their attending and visiting
"consultant" staff. While "consultants" are not,
technically employees, a point which respondent
hospital asserts in denying all responsibility for the
patient's condition, the control exercised, the hiring,
and the right to terminate consultants all fulfill the
important hallmarks of an employer-employee
relationship, with the exception of the payment of
wages. In assessing whether such a relationship in
fact exists, the control test is determining.
Accordingly, on the basis of the foregoing, we rule
that for the purpose of allocating responsibility in
medical negligence cases, an employer-employee
relationship in effect exists between hospitals and
their attending and visiting physicians. This being the
case, the question now arises as to whether or not
respondent hospital is solidarily liable with
respondent doctors for petitioner's condition. 76
The basis for holding an employer solidarily
responsible for the negligence of its employee is
found in Article 2180 of the Civil Code which
considers a person accountable not only for his own
acts but also for those of others based on the
former's responsibility under a relationship of patria
potestas. 77 Such responsibility ceases when the
persons or entity concerned prove that they have
13
observed the diligence of a good father of the family
to prevent damage. 78 In other words, while the
burden of proving negligence rests on the plaintiffs,
once negligence is shown, the burden shifts to the
respondents (parent, guardian, teacher or employer)
who should prove that they observed the diligence of
a good father of a family to prevent damage.
In the instant case, respondent hospital, apart from a
general denial of its responsibility over respondent
physicians, failed to adduce evidence showing that it
exercised the diligence of a good father of a family in
the hiring and supervision of the latter. It failed to
adduce evidence with regard to the degree of
supervision which it exercised over its physicians. In
neglecting to offer such proof, or proof of a similar
nature, respondent hospital thereby failed to
discharge its burden under the last paragraph of
Article 2180. Having failed to do this, respondent
hospital is consequently solidarily responsible with its
physicians for Erlinda's condition.
Based on the foregoing, we hold that the Court of
Appeals erred in accepting and relying on the
testimonies of the witnesses for the private
respondents. Indeed, as shown by the above
discussions, private respondents were unable to
rebut the presumption of negligence. Upon these
disquisitions we hold that private respondents are
solidarily liable for damages under Article 2176 79 of
the Civil Code.
We now come to the amount of damages due
petitioners. The trial court awarded a total of
P632,000.00 pesos (should be P616,000.00) in
compensatory damages to the plaintiff, "subject to its
being updated" covering the period from 15
November 1985 up to 15 April 1992, based on
monthly expenses for the care of the patient
estimated at P8,000.00.
At current levels, the P8000/monthly amount
established by the trial court at the time of its decision
would be grossly inadequate to cover the actual
costs of home-based care for a comatose individual.
The calculated amount was not even arrived at by
looking at the actual cost of proper hospice care for
the patient. What it reflected were the actual
expenses incurred and proved by the petitioners after
they were forced to bring home the patient to avoid
mounting hospital bills.
And yet ideally, a comatose patient should remain in
a hospital or be transferred to a hospice specializing
in the care of the chronically ill for the purpose of
providing a proper milieu adequate to meet minimum
standards of care. In the instant case for instance,
Erlinda has to be constantly turned from side to side
to prevent bedsores and hypostatic pneumonia.
Feeding is done by nasogastric tube. Food
preparation should be normally made by a dietitian to
provide her with the correct daily caloric
requirements and vitamin supplements.
Furthermore, she has to be seen on a regular basis
by a physical therapist to avoid muscle atrophy, and
by a pulmonary therapist to prevent the accumulation
of secretions which can lead to respiratory
complications.
Given these considerations, the amount of actual
damages recoverable in suits arising from
negligence should at least reflect the correct
minimum cost of proper care, not the cost of the care
the family is usually compelled to undertake at home
to avoid bankruptcy. However, the provisions of the
Civil Code on actual or compensatory damages
present us with some difficulties.
Well-settled is the rule that actual damages which
may be claimed by the plaintiff are those suffered by
him as he has duly proved. The Civil Code provides:
Art. 2199. — Except as provided by law or by
stipulation, one is entitled to an adequate
compensation only for such pecuniary loss
suffered by him as he has duly proved. Such
compensation is referred to as actual or
compensatory damages.
Our rules on actual or compensatory damages
generally assume that at the time of litigation, the
injury suffered as a consequence of an act of
negligence has been completed and that the cost can
be liquidated. However, these provisions neglect to
take into account those situations, as in this case,
where the resulting injury might be continuing and
possible future complications directly arising from the
injury, while certain to occur, are difficult to predict.
In these cases, the amount of damages which should
be awarded, if they are to adequately and correctly
respond to the injury caused, should be one which
compensates for pecuniary loss incurred and proved,
up to the time of trial; and one which would meet
pecuniary loss certain to be suffered but which could
not, from the nature of the case, be made with
certainty. 80 In other words, temperate damages can
and should be awarded on top of actual or
compensatory damages in instances where the injury
is chronic and continuing. And because of the unique
nature of such cases, no incompatibility arises when
both actual and temperate damages are provided for.
The reason is that these damages cover two distinct
phases.
As it would not be equitable — and certainly not in
the best interests of the administration of justice —
for the victim in such cases to constantly come before
the courts and invoke their aid in seeking
adjustments to the compensatory damages
previously awarded — temperate damages are
appropriate. The amount given as temperate
14
damages, though to a certain extent speculative,
should take into account the cost of proper care.
In the instant case, petitioners were able to provide
only home-based nursing care for a comatose patient
who has remained in that condition for over a decade.
Having premised our award for compensatory
damages on the amount provided by petitioners at
the onset of litigation, it would be now much more in
step with the interests of justice if the value awarded
for temperate damages would allow petitioners to
provide optimal care for their loved one in a facility
which generally specializes in such care. They
should not be compelled by dire circumstances to
provide substandard care at home without the aid of
professionals, for anything less would be grossly
inadequate. Under the circumstances, an award of
P1,500,000.00 in temperate damages would
therefore be reasonable. 81
In Valenzuela vs. Court of Appeals, 82 this Court was
confronted with a situation where the injury suffered
by the plaintiff would have led to expenses which
were difficult to estimate because while they would
have been a direct result of the injury (amputation),
and were certain to be incurred by the plaintiff, they
were likely to arise only in the future. We awarded
P1,000,000.00 in moral damages in that case.
Describing the nature of the injury, the Court therein
stated:
As a result of the accident, Ma. Lourdes
Valenzuela underwent a traumatic
amputation of her left lower extremity at the
distal left thigh just above the knee. Because
of this, Valenzuela will forever be deprived of
the full ambulatory functions of her left
extremity, even with the use of state of the
art prosthetic technology. Well beyond the
period of hospitalization (which was paid for
by Li), she will be required to undergo
adjustments in her prosthetic devise due to
the shrinkage of the stump from the process
of healing.
These adjustments entail costs, prosthetic
replacements and months of physical and
occupational rehabilitation and therapy.
During the lifetime, the prosthetic devise will
have to be replaced and readjusted to
changes in the size of her lower limb effected
by the biological changes of middle-age,
menopause and aging. Assuming she
reaches menopause, for example, the
prosthetic will have to be adjusted to respond
to the changes in bone resulting from a
precipitate decrease in calcium levels
observed in the bones of all post-
menopausal women. In other words, the
damage done to her would not only be
permanent and lasting, it would also be
permanently changing and adjusting to the
physiologic changes which her body would
normally undergo through the years. The
replacements, changes, and adjustments
will require corresponding adjustive physical
and occupational therapy. All of these
adjustments, it has been documented, are
painful.
xxx xxx xxx
A prosthetic devise, however technologically
advanced, will only allow a reasonable
amount of functional restoration of the motor
functions of the lower limb. The sensory
functions are forever lost. The resultant
anxiety, sleeplessness, psychological injury,
mental and physical pain are inestimable. 83
The injury suffered by Erlinda as a consequence of
private respondents' negligence is certainly much
more serious than the amputation in the Valenzuela
case.
Petitioner Erlinda Ramos was in her mid-forties when
the incident occurred. She has been in a comatose
state for over fourteen years now. The burden of care
has so far been heroically shouldered by her
husband and children, who, in the intervening years
have been deprived of the love of a wife and a
mother.
Meanwhile, the actual physical, emotional and
financial cost of the care of petitioner would be
virtually impossible to quantify. Even the temperate
damages herein awarded would be inadequate if
petitioner's condition remains unchanged for the next
ten years.
We recognized, in Valenzuela that a discussion of
the victim's actual injury would not even scratch the
surface of the resulting moral damage because it
would be highly speculative to estimate the amount
of emotional and moral pain, psychological damage
and injury suffered by the victim or those actually
affected by the victim's condition. 84 The husband
and the children, all petitioners in this case, will have
to live with the day to day uncertainty of the patient's
illness, knowing any hope of recovery is close to nil.
They have fashioned their daily lives around the
nursing care of petitioner, altering their long term
goals to take into account their life with a comatose
patient. They, not the respondents, are charged with
the moral responsibility of the care of the victim. The
family's moral injury and suffering in this case is
clearly a real one. For the foregoing reasons, an
award of P2,000,000.00 in moral damages would be
appropriate.
15
Finally, by way of example, exemplary damages in
the amount of P100,000.00 are hereby awarded.
Considering the length and nature of the instant suit
we are of the opinion that attorney's fees valued at
P100,000.00 are likewise proper.
Our courts face unique difficulty in adjudicating
medical negligence cases because physicians are
not insurers of life and, they rarely set out to
intentionally cause injury or death to their patients.
However, intent is immaterial in negligence cases
because where negligence exists and is proven, the
same automatically gives the injured a right to
reparation for the damage caused.
Established medical procedures and practices,
though in constant flux are devised for the purpose of
preventing complications. A physician's experience
with his patients would sometimes tempt him to
deviate from established community practices, and
he may end a distinguished career using unorthodox
methods without incident. However, when failure to
follow established procedure results in the evil
precisely sought to be averted by observance of the
procedure and a nexus is made between the
deviation and the injury or damage, the physician
would necessarily be called to account for it. In the
case at bar, the failure to observe pre-operative
assessment protocol which would have influenced
the intubation in a salutary way was fatal to private
respondents' case.
WHEREFORE, the decision and resolution of the
appellate court appealed from are hereby modified
so as to award in favor of petitioners, and solidarily
against private respondents the following: 1)
P1,352,000.00 as actual damages computed as of
the date of promulgation of this decision plus a
monthly payment of P8,000.00 up to the time that
petitioner Erlinda Ramos expires or miraculously
survives; 2) P2,000,000.00 as moral damages, 3)
P1,500,000.00 as temperate damages; 4)
P100,000.00 each as exemplary damages and
attorney's fees; and, 5) the costs of the suit.
SO ORDERED.
Davide, Jr., C.J., Puno, Pardo and Ynares-Santiago,
JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-33022 April 22, 1975
CENTRAL BANK OF THE
PHILIPPINES, petitioner,
vs.
COURT OF APPEALS and ABLAZA
CONSTRUCTION & FINANCE
CORPORATION, respondents.
F.E. Evangelista for petitioner.
Cruz, Villarin & Laureta for private respondent.
BARREDO, J.
Petition of the Central Bank of the Philippines for
review of the decision of the Court of Appeals in CA-
G.R. No. 43638-R affirming the judgment of the Court
of First Instance of Rizal in Civil Case No. Q-10919
sentenced petitioner to pay respondent Ablaza
Construction and Finance Corporation damages for
breach contract in that after having formally and
officially awarded, pursuant to the results of the usual
bidding to Ablaza in December 1965 the "contract"
for the construction of its San Fernando, La Union
branch building and allowed said contractor to
commence the work up to about May, 1966, albeit
without any written formal contract having been
executed, the Bank failed and refused to proceed
with the project, unless the plans were revised and a
lower price were agreed to by Ablaza, the Bank
claiming that its action was pursuant to the policy of
fiscal restraint announced by the then new President
of the Philippines on December 30, 1965 and the
Memorandum Circular No. 1 dated December 31,
1965 of the same President.
The factual background of this case is related in the
following portions of the decision of the trial court,
which the Court of Appeals affirmed without
modification:
Sometime in 1965, defendant
Central Bank of the Philippines
issued Invitations to Bid and
Instructions to Bidders for the
purpose of receiving sealed
proposals for the general
construction of its various proposed
regional offices, including the
Central Bank regional office building
in San Fernando, La Union.
16
In response to the aforesaid
Invitations to Bid, the plaintiff Ablaza
Construction and Finance
Corporation, which was one of the
qualified bidders, submitted a bid
proposal for the general construction
of defendant's proposed regional
office building in San Fernando, La
Union at the public bidding held on
November 3, 1965. The said
proposal was, as required by the
defendant accompanied by a cash
bidder's bond in the sum of
P275,000.00.
On December 7, 1965, the Monetary
Board of the defendant Central Bank
of the Philippines, after evaluating all
the bid proposals submitted during
the above-mentioned bidding,
unanimously voted and approved
the award to the plaintiff of the
contract for the general construction
of defendant's proposed regional
office building in San Fernando, La
Union, for the sum of P3,749,000.00
under plaintiff's Proposal Item No. 2.
Pursuant thereto, on December 10,
1965, Mr. Rizalino L. Mendoza,
Assistant to the Governor and
concurrently the Chairman of the
Management Building Committee of
the defendant Central Bank of the
Philippines, set a telegram to the
plaintiff, informing the latter that the
contract for the general construction
of defendant's proposed regional
office building in San Fernando, La
Union, had been awarded to the
plaintiff. The said telegram was
followed by a formal letter, also
dated December 10, 1965, duly
signed by said Mr. Rizalino L.
Mendoza, confirming the approval of
the award of the above-stated
contract under plaintiff's Proposal
Item No. 2 in the amount of
P3,749,000.00.
Upon receipt of the aforementioned
letter, plaintiff immediately accepted
the said award by means of a letter
dated December 15, 1965, whereby
plaintiff also requested permission
for its workmen to enter the site of
the project, build a temporary shelter
and enclosure, and do some
clearing job thereat. Accordingly,
said permission was granted by the
defendant as embodied in its letter
dated January 4, 1966, addressed to
the plaintiff..
Within five (5) days from receipt by
the plaintiff of the said notice of
award, and several times thereafter
Mr. Nicomedes C. Ablaza, an officer
of the plaintiff corporation, went
personally to see Mr. Rizalino L.
Mendoza at the latter's Central Bank
office to follow up the signing of the
corresponding contract. A
performance bond in the total
amount of P962,250.00
(P275,000.00 of which was in cash
and P687,250.00 in the form of a
surety bond) was subsequently
posted by the plaintiff in compliance
with the above-stated Instructions to
Bidders, which bond was duly
accepted by the defendant.
Pursuant to the permission granted
by the defendant, as aforesaid,
plaintiff commenced actual
construction work on the project
about the middle of January, 1966.
On February 8, 1966, by means of a
formal letter, defendant requested
the plaintiff to submit a schedule of
deliveries of materials which,
according to plaintiff's accepted
proposal, shall be furnished by the
defendant. In compliance therewith,
on February 16, 1966, plaintiff
submitted to the defendant the
schedule of deliveries requested for.
During the period when the actual
construction work on the project was
in progress, Mr. Nicomedes G.
Ablaza had several meetings with
Mr. Rizalino L. Mendoza at the
latter's office in the Central Bank.
During those meetings, they
discussed the progress of the
construction work being then
undertaken by the plaintiff of the
projects of the defendant in San
Fernando, La Union, including the
progress of the excavation work.
Sometime during the early part of
March, 1966, Mr. Rizalino L.
Mendoza was at the construction
site of the said project. While he was
there, he admitted having seen pile
of soil in the premises. At that time,
the excavation work being
undertaken by the plaintiff was about
20% complete. On March 22, 1966,
17
defendant again wrote the plaintiff,
requesting the latter to submit the
name of its representative
authorized to sign the building
contract with the defendant. In
compliance with the said request,
plaintiff submitted to the defendant
the name of its duly authorized
representative by means of a letter
dated March 24, 1966.
A meeting called by the defendant
was held at the conference room of
the Central Bank on May 20, 1966.
At the said meeting, the defendant,
thru Finance Secretary Eduardo
Romualdez, announced, among
other things, the reduction of the
appropriations for the construction of
the defendant's various proposed
regional offices, including that of the
proposed San Fernando, La Union
regional office building, the
construction of which had already
been started by the plaintiff. He also
stated that the Central Bank
Associated Architects would be
asked to prepare new plans and
designs based on such reduced
appropriations. The defendant,
during that same meeting, also
advised the plaintiff, thru Messrs.
Nicomedes G. Ablaza and Alfredo
G. Ablaza (who represented the
plaintiff corporation at the said
meeting), to stop its construction
work on the Central Bank Regional
office building in San Fernando, La
Union. This was immediately
complied with by the plaintiff,
although its various construction
equipment remained in the jobsite.
The defendant likewise presented
certain offer and proposals to the
plaintiff, among which were: (a) the
immediate return of plaintiff's cash
bidder's bond of P275,000.00; (b)
the payment of interest on said
bidder's bond at 12% per annum; (c)
the reimbursement to the plaintiff of
the value of all the work
accomplished at the site; (d) the
entering into a negotiated contract
with the plaintiff on the basis of the
reduced appropriation for the project
in question; and (e) the
reimbursement of the premium on
plaintiff's performance bond. Not
one of these offers and proposals of
the defendant, however, was
accepted by the plaintiff during that
meeting of May 20, 1966.
On June 3, 1966, plaintiff, thru
counsel, wrote the defendant,
demanding for the formal execution
of the corresponding contract,
without prejudice to its claim for
damages. The defendant, thru its
Deputy Governor, Mr. Amado R.
Brinas, on June 15, 1966, replied to
the said letter of the plaintiff,
whereby the defendant claimed that
an agreement was reached between
the plaintiff and the defendant during
the meeting held on May 20, 1966.
On the following day, however, in its
letter dated June 16, 1966, the
plaintiff, thru counsel, vehemently
denied that said parties concluded
any agreement during the meeting in
question.
On July 5, 1966, defendant again
offered to return plaintiff's cash
bidder's bond in the amount of
P275,000.00. The plaintiff, thru
counsel, on July 6, 1966, agreed to
accept the return of the said cash
bond, without prejudice, however, to
its claims as contained in its letters
to the defendant dated June 3, June
10, and June 16, 1966, and with
further reservation regarding
payment of the corresponding
interest thereon. On July 7, 1966,
the said sum of P275,000.00 was
returned by the defendant to the
plaintiff.
On January 30, 1967, in accordance
with the letter of the plaintiff, thru
counsel, dated January 26, 1967,
the construction equipment of the
plaintiff were pulled out from the
construction site, for which the
plaintiff incurred hauling expenses.
The negotiations of the parties for
the settlement of plaintiff's claims out
of court proved to be futile; hence,
the present action was instituted by
plaintiff against the defendant." (Pp.
249-256, Rec. on Appeal).
It may be added that the Instructions to Bidders on
the basis of which the bid and award in question were
submitted and made contained, among others, the
following provisions:
IB 113.4 The acceptance of the
Proposal shall be communicated in
writing by the Owner and no other
act of the Owner shall constitute the
18
 acceptance of the Proposal. The
acceptance of a Proposal shall bind
the successful bidder to execute the
Contract and to be responsible for
liquidated damages as herein
provided. The rights and obligations
provided for in the Contract shall
become effective and binding upon
the parties only with its formal
execution.
xxx xxx xxx
IB 114.1 The bidder whose proposal
is accepted will be required to
appear at the Office of the Owner in
person, or, if a firm or corporation, a
duly authorized representative shall
so appear, and to execute that
contract within five (5) days after
notice that the contract has been
awarded to him. Failure or neglect to
do so shall constitute a breach of
agreement effected by the
acceptance of the Proposal.
xxx xxx xxx
IB 118.1 The Contractor shall
commence the work within ten (10)
calendar days from the date he
receives a copy of the fully executed
Contract, and he shall complete the
work within the time specified." (Pp.
18-19 & 58-59, Petitioner-
Appellant's Brief.)
In the light of these facts, petitioner has made the
following assignment of errors:
I. THE COURT OF APPEALS
ERRED IN HOLDING THAT THERE
WAS A PERFECTED CONTRACT
BETWEEN PETITIONER
CENTRAL BANK OF THE
PHILIPPINES AND RESPONDENT
ABLAZA CONSTRUCTION & proposed contract or agreement
FINANCE CORPORATION FOR
THE GENERAL CONSTRUCTION
WORK OF PETITIONER'S
REGIONAL OFFICE BUILDING AT
SAN FERNANDO, LA UNION.
II. THE COURT OF APPEALS
ERRED IN HOLDING THAT
PETITIONER HAS COMMITTED A
BREACH OF CONTRACT.
III. THE COURT OF APPEALS
ERRED IN HOLDING THAT
PETITIONER HAD GIVEN ITS
APPROVAL TO THE WORK DONE
BY RESPONDENT ABLAZA
CONSTRUCTION & FINANCE
CORPORATION.
IV. THE COURT OF APPEALS
ERRED IN HOLDING THAT THE
AWARD OF ACTUAL AND
COMPENSATORY DAMAGES,
ATTORNEY'S FEES AND
RETAINING FEE IS FAIR AND
REASONABLE, AND IN HOLDING
THAT PETITIONER IS LIABLE FOR
COSTS." (Pp. A & B, Petitioner-
Appellant's Brief.)
Under the first assigned error, petitioner denotes the
major part of its effort to the discussion of its
proposition that there could be no perfected contract
in this case, (contrary to the conclusion of the courts
below) because there is no showing of compliance,
and in fact, there has been no compliance with the
requirement that there must be a certification of the
availability of funds by the Auditor General pursuant
to Section 607 of the Revised Administrative Code
which provides thus:
Section 607. Certificate showing
appropriation to meet contract. —
Except in the case of a contract for
personal service or for supplies to be
carried in stock, no contract
involving an expenditure by the
National Government of three
thousand pesos or more shall be
entered into or authorized until the
Auditor General shall have certified
to the officer entering into such
obligation that funds have been duly
appropriated for such purpose and
that the amount necessary to cover
the proposed contract is available
for expenditure on account thereof.
When application is made to the
Auditor General for the certificate
herein required, a copy of the
shall be submitted to him
accompanied by a statement in
writing from the officer making the
application showing all obligations
not yet presented for audit which
have been incurred against the
appropriation to which the contract
in question would be chargeable;
and such certificate, when signed by
the Auditor, shall be attached to and
become a part of the proposed
contract, and the sum so certified
shall not thereafter be available for
19
 expenditure for any other purposes have been upheld by this Honorable
until the Government is discharged Court in the case of Tan C. Tee Co.
from the contract in question. vs. Wright, 53 Phil. 172, in which
case it was held that the award of the
Except in the case of a contract for contract to the lowest bidder does
supplies to be carried in stock, no not amount to entering into the
contract involving the expenditure by contract because of the requirement
any province, municipality, of Section 607 of the Revised
chartered city, or municipal district of Administrative Code that a copy of
two thousand pesos or more shall be the proposed contract shall be
entered into or authorized until the submitted to the Auditor General
treasurer of the political division together with a request for the
concerned shall have certified to the availability of funds to cover the
officer entering into such contract proposed contract. Thus, this
that funds have been duly Honorable Court held:
appropriated for such purpose and
that the amount necessary to cover 'To award the
the proposed contract is available contract to the
for expenditure on account thereof. lowest responsible
Such certificate, when signed by the bidder is not the
said treasurer, shall be attached to equivalent of
and become part of the proposed entering into the
contract and the sum so certified contract. Section
shall not thereafter be available for 607 of the
expenditure for any other purpose Administrative
until the contract in question is Code requires that
lawfully abrogated or discharged. a copy of the
proposed contract
For the purpose of making the shall be submitted
certificate hereinabove required along with the
ninety per centum of the estimated request for the
revenues and receipts which should certificate of
accrue during the current fiscal year availability of funds,
but which are yet uncollected, shall but there could be
be deemed to be in the treasury of no proposed
the particular branch of the contract to be
Government against which the submitted until after
obligation in question would create a the award was
charge." (Pp. 23-25, Petitioner- made.'
Appellant's Brief.)
And to guide government authorities
It is contended that in view of such omission and in the letting of government
considering the provisions of Section 608 of the contracts, this Honorable Court, in
same code to the effect that "a purported contract said case of Tan C. Tee vs. Wright,
entered into contrary to the requirements of the next supra, laid down the procedure
preceding section hereof shall be wholly void", "no which should be followed, as
contract between the petitioner and respondent follows:
Ablaza Construction and Finance Corporation for the
general construction of the proposed regional office `PROCEDURE
building of the Central Bank in San Fernando, La WHICH SHOULD
Union, was ever perfected because only the first BE FOLLOWED IN
stage, that is the award of the contract to the lowest THE LETTING OF
responsible bidder, respondent Ablaza Construction CONTRACTS FOR
and Finance Corporation, was completed." (p. 29, INSULAR WORKS.
Petitioner-Appellant's Brief.) And in support of this — The procedure
pose, petitioner relies heavily on Tan C. Tee & Co. which should be
vs. Wright thus: followed in the
letting of contracts
The aforesaid requirements of the for Insular works is
Revised Administrative Code for the the following: First,
perfection of government contracts there is an award of

20
 the contract by the
Director of Public
Works to the lowest
responsible bidder.
Second, there is a
certificate of
availability of funds
to be obtained from
the Insular Auditor,
and in some cases
from the Insular
Treasurer, to cover
the proposed
contract. And third,
there is a contract
to be executed on
behalf of the
Government by the
Director of Public
Works with the
approval of the
department head.'"
(Pp. 27-28,
Petitioner-
Appellant's Brief.)
The contention is without merit. To start with, the
record reveals that it is more of an afterthought.
Respondent never raised this question whether in its
pleadings or at the hearings in the trial court. We
have also read its brief in the appellate court and no
mention is made therein of this point. Not even in its
memorandum submitted to that court in lieu of oral
argument is there any discussion thereof, even as it
appears that emphasis was given therein to various
portions of the Revised Manual of Instructions to
Treasurers regarding the perfection and constitution
of public contracts. In fact, reference was made
therein to Administrative Order No. 290 of the
President of the Philippines, dated February 5, 1959,
requiring "all contracts of whatever nature involving
P10,000 or more to be entered into by all bureaus
and offices, ... including the ... Central Bank ... shall
be submitted to the Auditor General for examination
and review before the same are perfected and/or
consummated, etc.", without mentioning, however,
that said administrative order was no longer in force,
the same having been revoked on January 17, 1964
by President Macapagal under Administrative Order
No. 81, s. 1964.
Hence, if only for the reason that it is a familiar rule
in procedure that defenses not pleaded in the answer
may not be raised for the first time on appeal,
petitioner's position cannot be sustained. Indeed, in
the Court of Appeals, petitioner could only bring up
such questions as are related to the issues made by
the parties in their pleadings, particularly where
factual matters may be involved, because to permit a
party to change his theory on appeal "would be unfair
to the adverse party." (II, Moran, Rules of Court, p.
505, 1970 ed.) Furthermore, under Section 7 of Rule
51, the appellate court cannot consider any error of
the lower court "unless stated in the assignment of
errors and properly argued in the brief."
Even prescinding from this consideration of
belatedness, however, it is Our considered view that
contracts entered into by petitioner Central Bank are
not within the contemplation of Sections 607 and 608
cited by it. Immediately to be noted, Section 607
specifically refers to "expenditure(s) of the National
Government" and that the term "National
Government" may not be deemed to include the
Central Bank. Under the Administrative Code itself,
the term "National Government" refers only to the
central government, consisting of the legislative,
executive and judicial departments of the
government, as distinguished from local
governments and other governmental entities and is
not synonymous, therefore, with the terms "The
Government of the Republic of the Philippines" or
"Philippine Government", which are the expressions
broad enough to include not only the central
government but also the provincial and municipal
governments, chartered cities and other government-
controlled corporations or agencies, like the Central
Bank. (I, Martin, Administrative Code, p. 15.)
To be sure the Central Bank is a government
instrumentality. But it was created as an autonomous
body corporate to be governed by the provisions of
its charter, Republic Act 265, "to administer the
monetary and banking system of the Republic." (Sec.
1) As such, it is authorized "to adopt, alter and use a
corporate seal which shall be judicially noticed; to
make contracts; to lease or own real and personal
property, and to sell or otherwise dispose of the
same; to sue and be sued; and otherwise to do and
perform any and all things that may be necessary or
proper to carry out the purposes of this Act. The
Central Bank may acquire and hold such assets and
incur such liabilities as result directly from operations
authorized by the provisions of this Act, or as are
essential to the proper conduct of such operations."
(Sec. 4) It has capital of its own and operates under
a budget prepared by its own Monetary Board and
otherwise appropriates money for its operations and
other expenditures independently of the national
budget. It does not depend on the National
Government for the financing of its operations; it is
the National Government that occasionally resorts to
it for needed budgetary accommodations. Under
Section 14 of the Bank's charter, the Monetary Board
may authorize such expenditures by the Central
Bank as are in the interest of the effective
administration and operation of the Bank." Its
prerogative to incur such liabilities and expenditures
is not subject to any prerequisite found in any statute
or regulation not expressly applicable to it. Relevantly
to the issues in this case, it is not subject, like the
Social Security Commission, to Section 1901 and
related provisions of the Revised Administrative
Code which require national government
21
constructions to be done by or under the supervision
of the Bureau of Public Works. (Op. of the Sec. of
Justice No. 92, Series of 1960) For these reasons,
the provisions of the Revised Administrative Code
invoked by the Bank do not apply to it. To Our
knowledge, in no other instance has the Bank ever
considered itself subject thereto.
In Zobel vs. City of Manila, 47 Phil. 169, this Court
adopted a restrictive construction of Section 607 of
the Administrative Code thus:
The second question to be considered has reference
to the applicability of section 607 of the
Administrative Code to contracts made by the City of
Manila. In the second paragraph of said section it is
declared that no contract involving the expenditure
by any province, municipality, township, or
settlement of two thousand pesos or more shall be
entered into or authorized until the treasurer of the
political division concerned shall have certified to the
officer entering into such contract that funds have
been duly appropriated for such purpose and that the
amount necessary to cover the proposed contract is
available for expenditure on account thereof. It is
admitted that no such certificate was made by the
treasurer of Manila at the time the contract now in
question was made. We are of the opinion that the
provision cited has no application to contracts of a
chartered city, such as the City of Manila. Upon
examining said provision (sec. 607) it will be found
that the term chartered city, or other similar
expression, such as would include the City of Manila,
is not used; and it is quite manifest from the careful
use of terms in said section that chartered cities were
intended to be excluded. In this connection the
definitions of "province," "municipality," and
"chartered city," given in section 2 of the
Administrative Code are instructive. The
circumstance that for certain purposes the City of
Manila has the status both of a province and a
municipality (as is true in the distribution of revenue)
is not inconsistent with this conclusion."1
We perceive no valid reason why the Court should
not follow the same view now in respect to the first
paragraph of the section by confirming its application
only to the offices comprised within the term National
Government as above defined, particularly insofar as
government-owned or created corporations or
entities having powers to make expenditures and to
incur liabilities by virtue of their own corporate
authority independently of the national or local
legislative bodies, as in the case of the petitioner
herein, are concerned. Whenever necessary, the
Monetary Board, like any other corporate board,
makes all required appropriations directly from the
funds of the Bank and does not need any official
statement of availability from its treasurer or auditor
and without submitting any papers to, much less
securing the approval of the Auditor General or any
outside authority before doing so. Indeed, this is
readily to be inferred from the repeal already
mentioned earlier of Administrative Order No. 290, s.
1959, which petitioner tried to invoke, overlooking
perhaps such repeal. In other words, by that repeal,
the requirement that the Central Bank should submit
to the Auditor General for examination and review
before contracts involving P10,000 or more to be
entered into by it "before the same are perfected
and/or consummated" had already been eliminated
at the time the transaction herein involved took place.
Consequently, the point of invalidity pressed,
belatedly at that, by petitioner has no leg to stand on.
The other main contention of petitioner is that the
purported or alleged contract being relied upon by
respondent never reached the stage of perfection
which would make it binding upon the parties and
entitle either of them to sue for specific performance
in case of breach thereof. In this connection, since
the transaction herein involved arose from the award
of a construction contract2 by a government
corporation and the attempt on its part to discontinue
with the construction several months after such
award had been accepted by the contractor and after
the latter had already commenced the work without
any objection on the part of the corporation, so much
so that entry into the site for the purpose was upon
express permission from it, but before any written
contract has been executed, it is preferable that
certain pertinent points be clarified for the proper
resolution of the issue between the parties here and
the general guidance of all who might be similarly
situated.
Petitioner buttresses its position in regard to this
issue on the provisions earlier quoted in this opinion
of the Instruction to Bidders:
IB 113.4 The acceptance of the
Proposal shall be communicated in
writing by the Owner and no other
act of the Owner shall constitute the
acceptance of the Proposal. The
acceptance of a Proposal shall bind
the successful bidder to execute the
Contract and to be responsible for
liquidated damages as herein
provided. The rights and obligations
provided for in the Contract shall
become effective and binding upon
the parties only with its formal
execution.
xxx xxx xxx
IB 118.1 The Contractor shall
commence the work within ten (10)
calendar days from the date he
receives a copy of the fully executed
Contract, and he shall complete the
22
 work within the time specified." (Pp.
18-19, Petitioner-Appellant's Brief.)
Petitioner insists that under these provisions, the
rights and obligations of the Bank and Ablaza could
become effective and binding only upon the
execution of the formal contract, and since admittedly
no formal contract has yet been signed by the parties
herein, there is yet no perfected contract to speak of
and respondent has, therefore, no cause of action
against the Bank. And in refutation of respondent's
argument that it had already started the work with
some clearing job and foundation excavations, which
has never been stopped by petitioner who had
previously given express permission to respondent to
enter the jobsite, build a temporary shelter and
enclosures thereon, petitioner counters that under
the above instructions, respondent is supposed to
commence the work "within ten (10) calendar days
from the date he receives a copy of the fully executed
Contract," and for said respondent to have started
actual construction work before any contract has
been signed was unauthorized and was
consequently undertaken at his own risk, all the
above circumstances indicative of estoppel
notwithstanding.
We are not persuaded that petitioner's posture
conforms with law and equity. According to
Paragraph IB 114.1 of the Instructions to Bidders,
Ablaza was "required to appear in the office of the
Owner (the Bank) in person, or, if a firm or
corporation, a duly authorized representative
(thereof), and to execute the contract within five (5)
days after notice that the contract has been awarded
to him. Failure or neglect to do so shall constitute a
breach of agreement effected by the acceptance of
the Proposal." There can be no other meaning of this
provision than that the Bank's acceptance of the bid
of respondent Ablaza effected an actionable
agreement between them. We cannot read it in the
unilateral sense suggested by petitioner that it bound
only the contractor, without any corresponding
responsibility or obligation at all on the part of the
Bank. An agreement presupposes a meeting of
minds and when that point is reached in the
negotiations between two parties intending to enter
into a contract, the purported contract is deemed
perfected and none of them may thereafter
disengage himself therefrom without being liable to
the other in an action for specific performance.
The rather ambiguous terms of Paragraph IB 113.4
of the Instructions to Bidders relied upon by petitioner
have to be reconciled with the other paragraphs
thereof to avoid lack of mutuality in the relation
between the parties. This invoked paragraph
stipulates that "the acceptance of (respondent's)
Proposal shall bind said respondent to execute the
Contract and to be responsible for liquidated
damages as herein provided." And yet, even if the
contractor is ready and willing to execute the formal
contract within the five (5) day period given to him,
petitioner now claims that under the invoked
provision, it could refuse to execute such contract
and still be absolutely free from any liability to the
contractor who, in the meantime, has to make
necessary arrangements and incur expenditures in
order to be able to commence work "within ten (10)
days from the date he receives a copy of the fully
executed Contract," or be responsible for damages
for delay. The unfairness of such a view is too evident
to be justified by the invocation of the principle that
every party to a contract who is sui juris and who has
entered into it voluntarily and with full knowledge of
its unfavorable provisions may not subsequently
complain about them when they are being enforced,
if only because there are other portions of the
Instruction to Bidders which indicate the contrary.
Certainly, We cannot sanction that in the absence of
unavoidable just reasons, the Bank could simply
refuse to execute the contract and thereby avoid it
entirely. Even a government owned corporation may
not under the guise of protecting the public interest
unceremoniously disregard contractual
commitments to the prejudice of the other party.
Otherwise, the door would be wide open to abuses
and anomalies more detrimental to public interest. If
there could be instances wherein a government
corporation may justifiably withdraw from a
commitment as a consequence of more paramount
considerations, the case at bar is not, for the reasons
already given, one of them.
As We see it then, contrary to the contention of the
Bank, the provision it is citing may not be considered
as determinative of the perfection of the contract here
in question. Said provision only means that as
regards the violation of any particular term or
condition to be contained in the formal contract, the
corresponding action therefor cannot arise until after
the writing has been fully executed. Thus, after the
Proposal of respondent was accepted by the Bank
thru its telegram and letter both dated December 10,
1965 and respondent in turn accepted the award by
its letter of December 15, 1965, both parties became
bound to proceed with the subsequent steps needed
to formalize and consummate their agreement.
Failure on the part of either of them to do so, entities
the other to compensation for the resulting damages.
To such effect was the ruling of this Court in Valencia
vs. RFC 103 Phil. 444. We held therein that the
award of a contract to a bidder constitutes an
acceptance of said bidder's proposal and that "the
effect of said acceptance was to perfect a contract,
upon notice of the award to (the bidder)". (at p. 450)
We further held therein that the bidder's "failure to
(sign the corresponding contract) do not relieve him
of the obligation arising from the unqualified
acceptance of his offer. Much less did it affect the
existence of a contract between him and
respondent". (at p. 452)
23
It is neither just nor equitable that Valencia should be
construed to have sanctioned a one-sided view of the
perfection of contracts in the sense that the
acceptance of a bid by a duly authorized official of a
government-owned corporation, financially and
otherwise autonomous both from the National
Government and the Bureau of Public Works, insofar
as its construction contracts are concerned, binds
only the bidder and not the corporation until the
formal execution of the corresponding written
contract.
Such unfairness and inequity would even be more
evident in the case at bar, if We were to uphold
petitioner's pose. Pertinently to the point under
consideration, the trial court found as follows:
To determine the amount of damages recoverable
from the defendant, plaintiff's claim for actual
damages in the sum of P298,433.35, as hereinabove
stated, and the recommendation of Messrs.
Ambrosio R. Flores and Ricardo Y. Mayuga, as
contained in their separate reports (Exhs. "13" and
"15"), in the amounts of P154,075.00 and
P147,500.00, respectively, should be taken into
account.
There is evidence on record showing that plaintiff
incurred the sum of P48,770.30 for the preparation of
the jobsite, construction of bodegas, fences field
offices, working sheds, and workmen's quarters; that
the value of the excavation work accomplished by the
plaintiff at the site was P113,800.00; that the rental of
the various construction equipment of the plaintiff
from the stoppage of work until the removal thereof
from the jobsite would amount to P78,540.00 (Exhs.
"K" - "K-l"); that the interest on the cash bond of
P275,000.00 from November 3, 1965 to July 7, 1966
at 12% per annum would be P22,000.00; that for
removing said construction equipment from the
jobsite to Manila, plaintiff paid a hauling fee of
P700.00 (Exhs. "L" - "L-1" ); that for the performance
bond that the plaintiff posted as required under its
contract with the defendant, the former was obliged
to pay a premium of P2,216.55; and that the plaintiff
was likewise made to incur the sum of P32,406.50,
representing the 3% contractor's tax (Exhs. "AA" - "A-
l"). The itemized list of all these expenditures,
totalling P298,433.35 is attached to the records of
this case (Annex "B", Complaint) and forms part of
the evidence of the plaintiff. Mr. Nicomedes G.
Ablaza, the witness for the plaintiff, properly identified
said document and affirmed the contents thereof
when he testified during the hearing. The same
witness likewise explained in detail the various
figures contained therein, and identified the
corresponding supporting papers.
It is noteworthy, in this connection, that there is
nothing in the records that would show that the
defendant assailed the accuracy and/or
reasonableness of the figures presented by the
plaintiff; neither does it appear that the defendant
offered any evidence to refute said figures.
While it is claimed by the defendant that the plaintiff
incurred a total expense of only P154,075.00
according to the report of Mr. Ambrosio R. Flores, or
P147,500.00, according to the report of Mr. Ricardo
Y. Mayuga, the Court finds said estimates to be
inaccurate. To cite only an instance, in estimating,
the value of the excavation work, the defendant
merely measured the depth, length and width of the
excavated, area which was submerged in water,
without ascertaining the volume of rock and the
volume of earth actually excavated as was done by
the plaintiff who prepared a detailed plan showing the
profile of the excavation work performed in the site
(Exh. "B"). Likewise, the unit measure adopted by the
defendant was in cubic meter while it should be in
cubic yard. Also the unit price used by the defendant
was only P8.75 for rock excavation while it should be
P10.00 per cubic yard; and only P4.95 for earth
excavation while it should be P5.50 per cubic yard as
clearly indicated in plaintiff's proposal (Annex "A",
Complaint; same as Annex "1", Answer). The Court,
therefore, can not give credence to defendant's,
aforementioned estimates in view of their evident
inaccuracies.
The Court finds from the evidence adduced that
Plaintiff claim for actual damages in the sum of
P298,433.35 is meritorious.
The Bulk of plaintiffs claims consists of expected
profit which it failed to realize due to the breach of the
contract in question by the defendant. As previously
stated, the plaintiff seeks to recover the amount of
P814,190.00 by way of unrealized expected profit.
This figure represents 18% of P4,523,275.00 which
is the estimated direct cost of the subject project.
As it has been established by the evidence that the
defendant in fact was guilty of breach of contract and,
therefore, liable for damages (Art. 1170, New Civil
Code), the Court finds that the plaintiff is entitled to
recover from the defendant unrealized expected
profit as part of the actual or compensatory damages.
Indemnification for damages shall comprehend not
only the value of the loss suffered, but also that of the
profits which the obligee failed to obtain (Art. 2200,
New Civil Code).
Where a party is guilty of breach of contract, the other
party is entitled to recover the profit which the latter
would have been able to make had the contract been
performed (Paz P. Arrieta, et al., plaintiffs-appellees,
vs. National Rice Corporation defendant-appellant,
G.R. No. L-15645, promulgated on January 31, 1964;
Vivencio Cerrano, plaintiff-appellee, vs. Tan Chuco,
defendant-appellant, 38 Phil. 392).
24
Regarding the expected profit, a number of questions 25. Following the commencement of
will have to be answered: Is the 18% unrealized such construction work, petitioner
expected profit being claimed by the plaintiff Central Bank, through a letter dated
reasonable? Would the plaintiff be entitled to the February 8, 1966, formally
whole amount of said expected profit although there requested respondent Ablaza to
was only partial performance of the contract? Would submit to petitioner the following:
the 18% expected profit be based on the estimated
direct cost of the subject in the amount of (a) A schedule of deliveries
P4,523,275.00, or on plaintiff's bid proposal of of material which, under the
P3,749,000.00? terms of respondent
Ablaza's approved
On the question of reasonableness of the 18% proposal, were to be
expected profit, the Court noted that according to furnished by petitioner.
defendant's own expert witness, Mr. Ambrosio R.
Flores, 25% contractor's profit for a project similar in (b) A time-table for the
magnitude as the one involved in the present case accomplishment of the
would be ample and reasonable. Plaintiff's witness, construction work.
Mr. Nicomedes G. Ablaza, an experienced civil
engineer who has been actively engaged in the In short, as early as
construction business, testified that 15% to 20% February 8, 1966, or more
contractor's profit would be in accordance with the than three months prior to
standard engineering practice. Considering the type petitioner's repudiation of
of the project involved in this case, he stated, the the contract in question the
contractor's profit was placed at 18%. Taking into latter (petitioner) already
consideration the fact that this percentage of profit is took the above positive
even lower than what defendant's witness steps it compliance with its
considered to be ample and reasonable, the Court own obligations under the
believes that the reasonable percentage should be contract.
18% inasmuch as the actual work was not done
completely and the plaintiff has not invested the
whole amount of money called for by the project." 26. Acting upon petitioner's above
(Pp. 263-268, Record on Appeal.) letter of February 8, 1966, on
February 16, 1966, respondent
Ablaza submitted the schedule of
These findings have not been shown to Us to be
deliveries requested by petitioner.
erroneous. And additional and clarificatory details, (Commissioner's Report, R.A., p.
which We find to be adequately supported by the 182; Decision id., 252; also Exhs.
record, are stated in Respondents' brief thus:
"D" to "D-7", inclusive.)

23. In a letter dated January 4, 1966,

petitioner Central Bank, through the
same Mr. Mendoza, to this request
of respondent Ablaza. (Annex "D-1"
to the Partial Stipulation of Facts,
R.A., p. 146).
24. Acting upon this written
permission, respondent Ablaza
immediately brought its men and
equipment from Manila to the
construction site in San Fernando,
La Union, and promptly commenced
construction work thereat. This
work, consisted of the setting up of
an enclosure around the site, the
building of temporary shelter for its
workmen, and the making of the
necessary excavation works.
(Commissioner's Report, R.A., p.
181).
27. During the period of actual
construction, respondent Ablaza, on
several occasions, actually
discussed the progress of the work
with Mr. Mendoza. In addition, in
March 1966, the latter (Mr.
Mendoza) personally visited the
construction site. There he saw the
work which respondent had by that
time already accomplished which
consisted of the completion of
approximately 20% of the necessary
excavation works. (Commissioner's
Report, R.A., p. 182; Decision, id., p.
252).
28. Following Mr. Mendoza's visit at
the construction site, or more
specifically on March 22, 1966, the
latter (Mendoza) wrote to
respondent Ablaza, instructing the
latter to formally designate the
person to represent the corporation

25
at the signing of the formal
construction contract. (Exh. "H"; also
t.s.n., pp. 119-121, December 18,
1967).
29. By a letter dated March 24, 1966,
respondent Ablaza promptly
complied with the above request.
(Exh. "I"; also t.s.n., pp 121-123,
December 18, 1967).
30. Subsequently, respondent
Ablaza posted the required
performance guaranty bond in the
total amount of P962,250.00,
consisting of (a) a cash bond in the
amount of P275,000.00, and (b) a
surety bond, PSIC Bond No. B-252-
ML, dated May 19, 1966, in the
amount of P687,250.00. In this
connection, it is important to note
that the specific purpose of this bond
was to guarantee "the faithful
Performance of the Contract" by
respondent Ablaza. (Partial
Stipulation of Facts, par. 6, R.A., p.
141). This performance guaranty
bond was duly accepted by
petitioner.(Id.)
31. However, on May 20, 1966,
petitioner Central Bank called for a
meeting with representatives of
respondent Ablaza and another
contractor. This meeting was held at
the Conference Room of the Central
Bank Building. At this meeting, then
Finance Secretary Eduardo
Romualdez, who acted as the
representative of petitioner,
announced that the Monetary Board
had decided to reduce the
appropriations for the various
proposed Central Bank regional
office buildings, including the one for
San Fernando, La Union.
32. In view of this decision,
Secretary Romualdez informed
respondent Ablaza that new plans
and designs for the proposed
regional office building in San
Fernando would have to be drawn
up to take account of the reduction
in appropriation. Secretary
Romualdez then advised
respondent to suspendwork at the
construction site in San Fernando in
the meanwhile. (Decision, R.A., pp.
253-254).
33. After making the above
announcements, Secretary
Romualdez proposed that all
existing contracts previously entered
into between petitioner Central Bank
and the several winning contractors
(among them being respondent
Ablaza) be considered set aside.
34. Obviously to induce acceptance
of the above proposal, Secretary
Romualdez offered the following
concessions to respondent Ablaza:
(a) That its cash bond in the
amount of P275,000.00 be
released immediately, and
that interest be paid thereon
at the rate of 12% per
annum.
(b) That respondent Ablaza
be reimbursed for expenses
incurred for the premiums
on the performance bond
which it posted, and which
petitioner had already
accepted. (Decision, R.A.,
pp. 253-254).
35. In addition, Secretary
Romualdez also proposed the
conclusion of a new contract with
respondent Ablaza for the
construction of a more modest
regional office building at San
Fernando, La Union, on
a negotiated basis. However, the
sincerity and feasibility of this
proposal was rendered dubious by a
caveat attached to it, as follows:
'4. Where auditing
regulations would permit,
the Central Bank would
enter into a negotiated
contract with the said
corporation (Ablaza) for the
construction work on the
building on the basis of the
revised estimates.' (Annex
"8" to Answer, R.A., p. 95).
36. The revised cost fixed for this
proposed alternative regional office
building was fixed at a maximum of
P3,000,000.00 (compared to
P3,749,000.00 under the contract
originally awarded to respondent).
(Annex "6-A" to Answer, R.A., p. 87).
26
 37. Needless perhaps to state,
respondent Ablaza rejected the
above proposals (pars. 34 and 35,
supra.), and on June 3, 1966,
through counsel, wrote to petitioner
demanding the formal execution of
the contract previously awarded to it,
or in the alternative, to pay "all
damages and expenses suffered by
(it) in the total amount of
P1,181,950.00 ... "(Annex "7" to
Answer, R.A., pp. 89-91; Decision,
id., p. 254).
38. In a letter dated June 15, 1966,
petitioner Central Bank, through
Deputy Governor Amado R. Brinas,
replied to respondent Ablaza's
demand denying any liability on the
basis of the following claim:
`(That, allegedly) in line with
the agreement ... reached
between the Central Bank
and Ablaza Construction
and Finance Corporation at
a meeting held ... on May
20, 1966,' "whatever
agreements might have
been previously agreed
upon between (petitioner
and respondent) would be
considered set aside."
(Decision, R.A., p. 255;
Annex "8" to Answer, id., pp.
93-96.)
39. The above claim was, however,
promptly and peremptorily denied by
respondent Ablaza, through
counsel, in a letter dated June 16,
1966. (Partial Stipulation of Facts,
par. 9, R.A., p. 142, also Annex "G"
thereof; Commissioner's Report,
R.A., p. 185; Decision, id., p. 255.)"
(Appellee's Brief, pars. 23 to 39, pp.
14-19.)
None of these facts is seriously or in any event
sufficiently denied in petitioner's reply brief.
Considering all these facts, it is quite obvious that the
Bank's insistence now regarding the need for the
execution of the formal contract comes a little too late
to be believable. Even assuming arguendo that the
Revised Manual of Instructions to Treasurers were
applicable to the Central Bank, which is doubtful,
considering that under the provisions of its charter
already referred to earlier, disbursements and
expenditures of the Bank are supposed to be
governed by rules and regulations promulgated by
the Monetary Board, in this particular case, the
attitude and actuations then of the Bank in relation to
the work being done by Ablaza prior to May 20, 1966
clearly indicate that both parties assumed that the
actual execution of the written contract is a mere
formality which could not materially affect their
respective contractual rights and obligations. In legal
effect, therefore, the Bank must be considered as
having waived such requirement.
To be more concrete, from December 15, 1965,
when Ablaza accepted the award of the contract in
question, both parties were supposed to have seen
to it that the formal contract were duly signed. Under
the Instructions to Bidders, Ablaza was under
obligation to sign the same within five (5) days from
notice of the award, and so, he called on the Bank at
various times for that purpose. The Bank never
indicated until May, 1966 that it would not comply. On
the contrary, on February 8, 1966, Ablaza was
requested to submit a "schedule of deliveries of
materials" which under the terms of the bid were to
be furnished by the Bank. On March 22, 1966, Ablaza
received a letter from the Bank inquiring as to who
would be Ablaza's representative to sign the formal
contract. In the meanwhile, no less than Mr. Rizalino
Mendoza, the Chairman of the Management Building
Committee of the Central Bank who had been signing
for the Bank all the communications regarding the
project at issue, had visited the construction site in
March, 1966, just before he wrote the request
abovementioned of the 22nd of that month for the
nomination of the representative to sign the formal
contract, and actually saw the progress of the work
and that it was being continued, but he never
protested or had it stopped. All these despite the fact
that the Memorandum Circular being invoked by the
Bank was issued way back on December 31, 1965
yet. And when finally on May 20, 1966 the Bank met
with the representatives of Ablaza regarding the idea
of changing the plans to more economical ones,
there was no mention of the non-execution of the
contract as entitling the Bank to back out of it
unconditionally. Rather, the talk, according to the
findings of the lower courts, was about the possibility
of setting aside whatever agreement there was
already. Under these circumstances, it appears that
respondent has been made to believe up to the time
the Bank decided definitely not to honor any
agreement at all that its execution was not
indispensable to a contract to be considered as
already operating and respondent could therefore
proceed with the work, while the contract could be
formalized later.
Petitioner contends next that its withdrawal from the
contract is justified by the policy of economic restraint
ordained by Memorandum Circular No. 1. We do not
see it that way. Inasmuch as the contract here in
question was perfected before the issuance of said
Memorandum Circular, it is elementary that the same
may not be enforced in such a manner as to result in
27
the impairment of the obligations of the contract, for
that is not constitutionally permissible. Not even by
means of a statute, which is much more weighty than
a mere declaration of policy, may the government
issue any regulation relieving itself or any person
from the binding effects of a contract. (Section 1 (10),
Article III, Philippine Constitution of 1953 and Section
11, Article IV, 1973 Constitution of the Philippines.)
Specially in the case of the Central Bank, perhaps, it
might not have been really imperative that it should
have revised its plans, considering that it has its own
resources independent of those of the national
government and that the funds of the Central Bank
are derived from its own operations, not from taxes.
In any event, if the memorandum circular had to be
implemented, the corresponding action in that
direction should have been taken without loss of time
and before the contract in question had taken deeper
roots. It is thus clear that in unjustifiably failing to
honor its contract with respondent, petitioner has to
suffer the consequences of its action.
The last issue submitted for Our resolution refers to
the amount of damages awarded to Ablaza by the
trial court and found by the Court of Appeals to be
"fair and reasonable." Again, after a review of the
record, We do not find sufficient ground to disturb the
appealed judgment even in this respect, except as to
attorney's fees.
There are three principal items of damages awarded
by the courts below, namely: (1) compensation for
actual work done in the amount of P298,433.35, (2)
unrealized profits equivalent to 18% of the contract
price of P3,749,000 or P674,820.00 and (3) 15% of
the total recovery as attorney's fees in addition to the
P5,000 already paid as retaining fee. All of these
items were the subject of evidence presented by the
parties. According to the Court of Appeals:
As regard the accuracy and
reasonableness of the award for
damages, both actual and
compensatory, it is to be noted that
the trial court subjected the
Commissioner's report and the
evidence adduced therein to a
careful scrutiny. Thus, when the
appellant called the trial court's
attention to the fact that the
P814,190.00 unrealized expected
profit being claimed by appellee
represented 18% of P4,523,275.00
which was the estimated cost of the
project, while the contract awarded
to appellee was only in the amount
of P3,749,000.00 as per its bid
proposal, the Court made the
necessary modification. It is further
to be noted that the amount of 18%
of the estimated cost considered in
the said award is much less than that
given by appellant's own expert
witness, Ambrosio R. Flores. He
testified that 25% as contractor's
profit "would be fair, ample and
reasonable." (T.s.n, p. 557,
Batalla.)" (p. 17 A, Appellant's brief.)
Basically, these are factual conclusions which We
are not generally at liberty to disregard. And We have
not been shown that they are devoid of reasonable
basis.
There can be no dispute as to the legal obligation of
petitioner to pay respondent the actual expenses it
has incurred in performing its part of the contract.
Upon the other hand, the legal question of whether
or not the Bank is liable for unrealized profits
presents no difficulty. In Arrieta vs. Naric G.R. No. L-
15645, Jan. 31, 1964, 10 SCRA 79, this Court
sustained as a matter of law the award of damages n
the amount of U.S. $286,000, payable in Philippine
Currency, measured in the rate of exchange
prevailing at the time the obligation was incurred
(August, 1952), comprising of unrealized profits of
the plaintiff, Mrs. Paz Arrieta, in a case where a
government-owned corporation, the Naric failed to
proceed with the purchase of imported rice after
having accepted and approved the bid of Arrieta and
after she had already closed her contract with her
foreign sellers.
Actually, the law on the matter is unequivocally
expressed in Articles 2200 and 2201 of the Civil Code
thus:
ART. 2200. Identification for
damages shall comprehend not only
the value of the loss suffered, but
also that of the profits, which the
obligee failed to obtain..
ART. 2201. In contracts and quasi-
contracts, the damages for which
the obligor who acted in good faith is
liable shall be those that are the
natural and probable consequences
of the breach of the obligation, and
which the parties have forseen or
could have reasonably foreseen at
the time the obligation was
constituted.
In case of fraud, bad faith, malice or
wanton attitude, the obligor shall be
responsible for all damages which
may be reasonably attributed to the
non- performance of the obligation.
28
Construing these provisions, the following is what
this Court held in Cerrano vs. Tan Chuco, 38 Phil.
392:
.... Article 1106 (now 2200) of the
Civil Code establishes the rule that
prospective profits may be
recovered as damages, while article
1107 (now 2201) of the same Code
provides that the damages
recoverable for the breach of
obligations not originating in fraud
(dolo) are those which were or might
have been foreseen at the time the
contract was entered into. Applying
these principles to the facts in this
case, we think that it is
unquestionable that defendant must
be deemed to have foreseen at the
time he made the contract that in the
event of his failure to perform it, the
plaintiff would be damaged by the
loss of the profit he might reasonably
have expected to derive from its use.
When the existence of a loss is
established, absolute certainty as to
its amount is not required. The
benefit to be derived from a contract
which one of the parties has
absolutely failed to perform is of
necessity to some extent, a matter of
speculation, but the injured party is
not to be denied all remedy for that
reason alone. He must produce the
best evidence of which his case is
susceptible and if that evidence
warrants the inference that he has
been damaged by the loss of profits
which he might with reasonable
certainty have anticipated but for the
defendant's wrongful act, he is
entitled to recover. As stated in
Sedgwick on Damages (Ninth Ed.,
par. 177):
The general rule is, then, that a
plaintiff may recover compensation
for any gain which he can make it
appear with reasonable certainty the
defendant's wrongful act prevented
him from acquiring, ...'. (See also
Algarra vs. Sandejas, 27 Phil. Rep.,
284, 289; Hicks vs. Manila Hotel
Co., 28 Phil. Rep., 325.) (At pp. 398-
399.)
Later, in General Enterprises, Inc. vs. Lianga Bay
Logging Co. Inc., 11 SCRA 733, Article 2200 of the
Civil Code was again applied as follows:
Regarding the actual damages
awarded to appellee, appellant
contends that they are unwarranted
inasmuch as appellee has failed to
adduce any evidence to substantiate
them even assuming arguendo that
appellant has failed to supply the
additional monthly 2,000,000 board
feet for the remainder of the period
agreed upon in the contract Exhibit
A. Appellant maintains that for
appellee to be entitled to demand
payment of sales that were not
effected it should have proved (1)
that there are actual sales made of
appellee's logs which were not
fulfilled, (2) that it had obtained the
best price for such sales, (3) that
there are buyers ready to buy at
such price stating the volume they
are ready to buy, and (4) appellee
could not cover the sales from the
logs of other suppliers. Since these
facts were not proven, appellee's
right to unearned commissions must
fail.
This argument must be overruled in
the light of the law and evidence on
the matter. Under Article 2200 of the
Civil Code, indemnification for
damages comprehends not only the
value of the loss suffered but also
that of the profits which the creditor
fails to obtain. In other
words, lucrum cessans is also a
basis for indemnification. The
question then that arises is: Has
appellee failed to make profits
because of appellant's breach of
contract, and in the affirmative, is
there here basis for determining with
reasonable certainty such unearned
profits?
Appellant's memorandum (p. 9)
shows that appellee has sold to
Korea under the contract in question
the following board feet of logs,
Breareton Scale:
Months Board Feet
From June to August 1959
3,007,435
September, 1959 none
October, 1959 2,299,805
November, 1959 801,021
December, 1959 1,297,510
Total 7,405,861
29
The above figures tally with those of
Exhibit N. In its brief (p. 141)
appellant claims that in less than six
months' time appellee received by
way of commission the amount of
P117,859.54, while in its
memorandum, appellant makes the
following statement:
`11. The invoice F.O.B. price of the
sale through plaintiff General is
P767,798.82 but the agreed F.O.B.
price was P799,319.00, the
commission at 13% (F.O.B.) is
P117,859.54. But, as there were
always two prices — Invoice F.O.B
price and F.O.B. price as per
contract, because of the sales
difference amounting to P31,920.18,
and the same was deducted from
the commission, actually paid to
plaintiff General is only P79,580.82.'
" It appears, therefore, that during
the period of June to December,
1959, in spite of the short delivery
incurred by appellant, appellee had
been earning its commission
whenever logs were delivered to it.
But from January, 1960, appellee
had ceased to earn any commission
because appellant failed to deliver
any log in violation of their
agreement. Had appellant continued
to deliver the logs as it was bound to
pursuant to the agreement it is
reasonable to expect that it would
have continued earning its
commission in much the same
manner as it used to in connection
with the previous shipments of logs,
which clearly indicates that it failed
to earn the commissions it should
earn during this period of time. And
this commission is not difficult to
estimate. Thus, during the
seventeen remaining months of the
contract, at the rate of at least
2,000,000 board feet, appellant
should have delivered thirty-four
million board feet. If we take the
number of board feet delivered
during the months prior to the
interruption, namely, 7,405,861
board feet, and the commission
received by appellee thereon, which
amounts to P79,580.82, we would
have that appellee received a
commission of P.0107456 per board
feet. Multiplying 34 million board feet
by P.0107456, the product is
P365,350.40, which represents
the lucrum cessans that should
accrue to appellee. The award
therefore, made by the court a quo
of the amount of P400,000.00 as
compensatory damages is not
speculative, but based on
reasonable estimate.
In the light of these considerations, We cannot say
that the Court of Appeals erred in making the
aforementioned award of damages for unrealized
profits to respondent Ablaza.
With respect to the award for attorney's fees, We
believe that in line with the amount fixed in Lianga,
supra., an award of ten per centum (10%) of the
amount of the total recovery should be enough.
PREMISES CONSIDERED, the decision of the Court
of Appeals in this case is affirmed, with the
modification that the award for attorney's fees made
therein is hereby reduced to ten per centum (10%) of
the total recovery of respondent Ablaza.
Costs against petitioner.
Fernando (Chairman), Antonio, Aquino and
Concepcion, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-24803 May 26, 1977
PEDRO ELCANO and PATRICIA ELCANO, in
their capacity as Ascendants of Agapito
Elcano, deceased, plaintiffs-appellants,
vs.
REGINALD HILL, minor, and MARVIN HILL, as
father and Natural Guardian of said
minor, defendants-appellees.
Cruz & Avecilla for appellants.
Marvin R. Hill & Associates for appellees.
BARREDO, J.:
Appeal from the order of the Court of First Instance
of Quezon City dated January 29, 1965 in Civil
Case No. Q-8102, Pedro Elcano et al. vs. Reginald
Hill et al. dismissing, upon motion to dismiss of
defendants, the complaint of plaintiffs for recovery
30
of damages from defendant Reginald Hill, a minor,
married at the time of the occurrence, and his
father, the defendant Marvin Hill, with whom he
was living and getting subsistence, for the killing
by Reginald of the son of the plaintiffs, named
Agapito Elcano, of which, when criminally
prosecuted, the said accused was acquitted on the
ground that his act was not criminal, because of
"lack of intent to kill, coupled with mistake."
Actually, the motion to dismiss based on the
following grounds:
1. The present action is not only against
but a violation of section 1, Rule 107,
which is now Rule III, of the Revised Rules
of Court;
2. The action is barred by a prior judgment
which is now final and or in res-adjudicata;
3. The complaint had no cause of action
against defendant Marvin Hill, because he
was relieved as guardian of the other
defendant through emancipation by
marriage.
(P. 23, Record [p. 4, Record on Appeal.])
was first denied by the trial court. It was only upon
motion for reconsideration of the defendants of
such denial, reiterating the above grounds that the
following order was issued:
Considering the motion for reconsideration
filed by the defendants on January 14,
1965 and after thoroughly examining the
arguments therein contained, the Court
finds the same to be meritorious and well-
founded.
WHEREFORE, the Order of this Court on
December 8, 1964 is hereby reconsidered
by ordering the dismissal of the above
entitled case.
SO ORDERED.
Quezon City, Philippines, January 29,
1965. (p. 40, Record [p. 21, Record on
Appeal.)
Hence, this appeal where plaintiffs-appellants, the
spouses Elcano, are presenting for Our resolution
the following assignment of errors:
THE LOWER COURT ERRED IN
DISMISSING THE CASE BY
UPHOLDING THE CLAIM OF
DEFENDANTS THAT -
I
THE PRESENT ACTION IS NOT ONLY
AGAINST BUT ALSO A VIOLATION OF
SECTION 1, RULE 107, NOW RULE 111,
OF THE REVISED RULES OF COURT,
AND THAT SECTION 3(c) OF RULE 111,
RULES OF COURT IS APPLICABLE;
II
THE ACTION IS BARRED BY A PRIOR
JUDGMENT WHICH IS NOW FINAL OR
RES-ADJUDICTA;
III
THE PRINCIPLES OF QUASI-DELICTS,
ARTICLES 2176 TO 2194 OF THE CIVIL
CODE, ARE INAPPLICABLE IN THE
INSTANT CASE; and
IV
THAT THE COMPLAINT STATES NO
CAUSE OF ACTION AGAINST
DEFENDANT MARVIN HILL BECAUSE
HE WAS RELIEVED AS GUARDIAN OF
THE OTHER DEFENDANT THROUGH
EMANCIPATION BY MARRIAGE. (page
4, Record.)
It appears that for the killing of the son, Agapito, of
plaintiffs-appellants, defendant- appellee Reginald
Hill was prosecuted criminally in Criminal Case
No. 5102 of the Court of First Instance of Quezon
City. After due trial, he was acquitted on the
ground that his act was not criminal because of
"lack of intent to kill, coupled with mistake."
Parenthetically, none of the parties has favored Us
with a copy of the decision of acquittal, presumably
because appellants do not dispute that such
indeed was the basis stated in the court's decision.
And so, when appellants filed their complaint
against appellees Reginald and his father, Atty.
Marvin Hill, on account of the death of their son,
the appellees filed the motion to dismiss above-
referred to.
As We view the foregoing background of this case,
the two decisive issues presented for Our
resolution are:
31
1. Is the present civil action for damages barred by
the acquittal of Reginald in the criminal case
wherein the action for civil liability, was not
reversed?
2. May Article 2180 (2nd and last paragraphs) of
the Civil Code he applied against Atty. Hill,
notwithstanding the undisputed fact that at the
time of the occurrence complained of. Reginald,
though a minor, living with and getting subsistenee
from his father, was already legally married?
The first issue presents no more problem than the
need for a reiteration and further clarification of the
dual character, criminal and civil, of fault or
negligence as a source of obligation which was
firmly established in this jurisdiction in Barredo vs.
Garcia, 73 Phil. 607. In that case, this Court
postulated, on the basis of a scholarly dissertation
by Justice Bocobo on the nature of culpa
aquiliana in relation to culpa criminal or delito and
mere culpa or fault, with pertinent citation of
decisions of the Supreme Court of Spain, the
works of recognized civilians, and earlier
jurisprudence of our own, that the same given act
can result in civil liability not only under the Penal
Code but also under the Civil Code. Thus, the
opinion holds:
The, above case is pertinent because it
shows that the same act machinist. come
under both the Penal Code and the Civil
Code. In that case, the action of the agent
killeth unjustified and fraudulent and
therefore could have been the subject of a
criminal action. And yet, it was held to be
also a proper subject of a civil action under
article 1902 of the Civil Code. It is also to
be noted that it was the employer and not
the employee who was being sued. (pp.
615-616, 73 Phil.). 1
It will be noticed that the defendant in the
above case could have been prosecuted in
a criminal case because his negligence
causing the death of the child was
punishable by the Penal Code. Here is
therefore a clear instance of the same act
of negligence being a proper subject
matter either of a criminal action with its
consequent civil liability arising from a
crime or of an entirely separate and
independent civil action for fault or
negligence under article 1902 of the Civil
Code. Thus, in this jurisdiction, the
separate individuality of a cuasi-
delito or culpa aquiliana, under the Civil
Code has been fully and clearly
recognized, even with regard to a
negligent act for which the wrongdoer
could have been prosecuted and
convicted in a criminal case and for which,
after such a conviction, he could have
been sued for this civil liability arising from
his crime. (p. 617, 73 Phil.) 2
It is most significant that in the case just
cited, this Court specifically applied article
1902 of the Civil Code. It is thus that although
J. V. House could have been criminally
prosecuted for reckless or simple negligence
and not only punished but also made civilly
liable because of his criminal negligence,
nevertheless this Court awarded damages in
an independent civil action for fault or
negligence under article 1902 of the Civil
Code. (p. 618, 73 Phil.) 3
The legal provisions, authors, and cases
already invoked should ordinarily be
sufficient to dispose of this case. But
inasmuch as we are announcing doctrines
that have been little understood, in the
past, it might not he inappropriate to
indicate their foundations.
Firstly, the Revised Penal Code in articles
365 punishes not only reckless but also
simple negligence. If we were to hold that
articles 1902 to 1910 of the Civil Code
refer only to fault or negligence not
punished by law, accordingly to the literal
import of article 1093 of the Civil Code, the
legal institution of culpa aquiliana would
have very little scope and application in
actual life. Death or injury to persons and
damage to property- through any degree
of negligence - even the slightest - would
have to be Idemnified only through the
principle of civil liability arising from a
crime. In such a state of affairs, what
sphere would remain for cuasi-
delito or culpa aquiliana? We are loath to
impute to the lawmaker any intention to
bring about a situation so absurd and
anomalous. Nor are we, in the
interpretation of the laws, disposed to
uphold the letter that killeth rather than the
spirit that giveth life. We will not use the
literal meaning of the law to smother and
render almost lifeless a principle of such
ancient origin and such full-grown
development as culpa aquiliana or cuasi-
delito, which is conserved and made
enduring in articles 1902 to 1910 of the
Spanish Civil Code.
32
Secondary, to find the accused guilty in a
criminal case, proof of guilt beyond
reasonable doubt is required, while in a
civil case, preponderance of evidence is
sufficient to make the defendant pay in
damages. There are numerous cases of
criminal negligence which can not be
shown beyond reasonable doubt, but can
be proved by a preponderance of
evidence. In such cases, the defendant
can and should be made responsible in a
civil action under articles 1902 to 1910 of
the Civil Code. Otherwise. there would be
many instances of unvindicated civil
wrongs. "Ubi jus Idemnified remedium." (p.
620,73 Phil.)
Fourthly, because of the broad sweep of
the provisions of both the Penal Code and
the Civil Code on this subject, which has
given rise to the overlapping or
concurrence of spheres already
discussed, and for lack of understanding of
the character and efficacy of the action
for culpa aquiliana, there has grown up a
common practice to seek damages only by
virtue of the civil responsibility arising from
a crime, forgetting that there is another
remedy, which is by invoking articles 1902-
1910 of the Civil Code. Although this
habitual method is allowed by, our laws, it
has nevertheless rendered practically
useless and nugatory the more
expeditious and effective remedy based
on culpa aquiliana or culpa extra-
contractual. In the present case, we are
asked to help perpetuate this usual
course. But we believe it is high time we
pointed out to the harms done by such
practice and to restore the principle of
responsibility for fault or negligence under
articles 1902 et seq. of the Civil Code to its
full rigor. It is high time we caused the
stream of quasi-delict or culpa aquiliana to
flow on its own natural channel, so that its
waters may no longer be diverted into that
of a crime under the Penal Code. This will,
it is believed, make for the better
safeguarding or private rights because it
realtor, an ancient and additional remedy,
and for the further reason that an
independent civil action, not depending on
the issues, limitations and results of a
criminal prosecution, and entirely directed
by the party wronged or his counsel, is
more likely to secure adequate and
efficacious redress. (p. 621, 73 Phil.)
Contrary to an immediate impression one might
get upon a reading of the foregoing excerpts from
the opinion in Garcia that the concurrence of the
Penal Code and the Civil Code therein referred to
contemplate only acts of negligence and not
intentional voluntary acts - deeper reflection would
reveal that the thrust of the pronouncements
therein is not so limited, but that in fact it actually
extends to fault or culpa. This can be seen in the
reference made therein to the Sentence of the
Supreme Court of Spain of February 14, 1919,
supra, which involved a case of fraud or estafa, not
a negligent act. Indeed, Article 1093 of the Civil
Code of Spain, in force here at the time of Garcia,
provided textually that obligations "which are
derived from acts or omissions in which fault or
negligence, not punishable by law, intervene shall
be the subject of Chapter II, Title XV of this book
(which refers to quasi-delicts.)" And it is precisely
the underline qualification, "not punishable by
law", that Justice Bocobo emphasized could lead
to an ultimo construction or interpretation of the
letter of the law that "killeth, rather than the spirit
that giveth lift- hence, the ruling that "(W)e will not
use the literal meaning of the law to smother and
render almost lifeless a principle of such ancient
origin and such full-grown development as culpa
aquiliana or quasi-delito, which is conserved and
made enduring in articles 1902 to 1910 of the
Spanish Civil Code." And so, because Justice
Bacobo was Chairman of the Code Commission
that drafted the original text of the new Civil Code,
it is to be noted that the said Code, which was
enacted after the Garcia doctrine, no longer uses
the term, 11 not punishable by law," thereby
making it clear that the concept of culpa
aquiliana includes acts which are criminal in
character or in violation of the penal law, whether
voluntary or matter. Thus, the corresponding
provisions to said Article 1093 in the new code,
which is Article 1162, simply says, "Obligations
derived from quasi-delicto shall be governed by
the provisions of Chapter 2, Title XVII of this Book,
(on quasi-delicts) and by special laws." More
precisely, a new provision, Article 2177 of the new
code provides:
ART. 2177. Responsibility for fault or
negligence under the preceding article is
entirely separate and distinct from the civil
liability arising from negligence under the
Penal Code. But the plaintiff cannot
recover damages twice for the same act or
omission of the defendant.
According to the Code Commission: "The
foregoing provision (Article 2177) through at first
sight startling, is not so novel or extraordinary
when we consider the exact nature of criminal and
33
civil negligence. The former is a violation of the
criminal law, while the latter is a "culpa aquiliana"
or quasi-delict, of ancient origin, having always
had its own foundation and individuality, separate
from criminal negligence. Such distinction
between criminal negligence and "culpa
extracontractual" or "cuasi-delito" has been
sustained by decision of the Supreme Court of
Spain and maintained as clear, sound and
perfectly tenable by Maura, an outstanding
Spanish jurist. Therefore, under the proposed
Article 2177, acquittal from an accusation of
criminal negligence, whether on reasonable doubt
or not, shall not be a bar to a subsequent civil
action, not for civil liability arising from criminal
negligence, but for damages due to a quasi-delict
or 'culpa aquiliana'. But said article forestalls a
double recovery.", (Report of the Code)
Commission, p. 162.)
Although, again, this Article 2177 does seem to
literally refer to only acts of negligence, the same
argument of Justice Bacobo about construction
that upholds "the spirit that giveth lift- rather than
that which is literal that killeth the intent of the
lawmaker should be observed in applying the
same. And considering that the preliminary
chapter on human relations of the new Civil Code
definitely establishes the separability and
independence of liability in a civil action for acts
criminal in character (under Articles 29 to 32) from
the civil responsibility arising from crime fixed by
Article 100 of the Revised Penal Code, and, in a
sense, the Rules of Court, under Sections 2 and 3
(c), Rule 111, contemplate also the same
separability, it is "more congruent with the spirit of
law, equity and justice, and more in harmony with
modern progress"- to borrow the felicitous relevant
language in Rakes vs. Atlantic. Gulf and Pacific
Co., 7 Phil. 359, to hold, as We do hold, that Article
2176, where it refers to "fault or negligencia covers
not only acts "not punishable by law" but also acts
criminal in character, whether intentional and
voluntary or negligent. Consequently, a separate
civil action lies against the offender in a criminal
act, whether or not he is criminally prosecuted and
found guilty or acquitted, provided that the
offended party is not allowed, if he is actually
charged also criminally, to recover damages on
both scores, and would be entitled in such
eventuality only to the bigger award of the two,
assuming the awards made in the two cases vary.
In other words, the extinction of civil liability
referred to in Par. (e) of Section 3, Rule 111, refers
exclusively to civil liability founded on Article 100
of the Revised Penal Code, whereas the civil
liability for the same act considered as a quasi-
delict only and not as a crime is not estinguished
even by a declaration in the criminal case that the
criminal act charged has not happened or has not
been committed by the accused. Briefly stated, We
here hold, in reiteration of Garcia, that culpa
aquiliana includes voluntary and negligent acts
which may be punishable by law.4
It results, therefore, that the acquittal of Reginal
Hill in the criminal case has not extinguished his
liability for quasi-delict, hence that acquittal is not
a bar to the instant action against him.
Coming now to the second issue about the effect
of Reginald's emancipation by marriage on the
possible civil liability of Atty. Hill, his father, it is
also Our considered opinion that the conclusion of
appellees that Atty. Hill is already free from
responsibility cannot be upheld.
While it is true that parental authority is terminated
upon emancipation of the child (Article 327, Civil
Code), and under Article 397, emancipation takes
place "by the marriage of the minor (child)", it is,
however, also clear that pursuant to Article 399,
emancipation by marriage of the minor is not really
full or absolute. Thus "(E)mancipation by marriage
or by voluntary concession shall terminate
parental authority over the child's person. It shall
enable the minor to administer his property as
though he were of age, but he cannot borrow
money or alienate or encumber real property
without the consent of his father or mother, or
guardian. He can sue and be sued in court only
with the assistance of his father, mother or
guardian."
Now under Article 2180, "(T)he obligation imposed
by article 2176 is demandable not only for one's
own acts or omissions, but also for those of
persons for whom one is responsible. The father
and, in case of his death or incapacity, the mother,
are responsible. The father and, in case of his
death or incapacity, the mother, are responsible
for the damages caused by the minor children who
live in their company." In the instant case, it is not
controverted that Reginald, although married, was
living with his father and getting subsistence from
him at the time of the occurrence in question.
Factually, therefore, Reginald was still subservient
to and dependent on his father, a situation which
is not unusual.
It must be borne in mind that, according to
Manresa, the reason behind the joint and solidary
liability of presuncion with their offending child
under Article 2180 is that is the obligation of the
parent to supervise their minor children in order to
prevent them from causing damage to third
persons. 5 On the other hand, the clear implication of
34
Article 399, in providing that a minor emancipated by
marriage may not, nevertheless, sue or be sued
without the assistance of the parents, is that such
emancipation does not carry with it freedom to enter
into transactions or do any act that can give rise to
judicial litigation. (See Manresa, Id., Vol. II, pp. 766-
767, 776.) And surely, killing someone else invites
judicial action. Otherwise stated, the marriage of a
minor child does not relieve the parents of the duty to
see to it that the child, while still a minor, does not
give answerable for the borrowings of money and
alienation or encumbering of real property which
cannot be done by their minor married child without
their consent. (Art. 399; Manresa, supra.)
Accordingly, in Our considered view, Article 2180
applies to Atty. Hill notwithstanding the
emancipation by marriage of Reginald. However,
inasmuch as it is evident that Reginald is now of
age, as a matter of equity, the liability of Atty. Hill
has become milling, subsidiary to that of his son.
WHEREFORE, the order appealed from is
reversed and the trial court is ordered to proceed
in accordance with the foregoing opinion. Costs
against appellees.
Fernando (Chairman), Antonio, and Martin, JJ.,
concur.
Concepcon Jr., J, is on leave.
Martin, J, was designated to sit in the Second
Division.
Separate Opinions
AQUINO, J, concurring:
Article 2176 of the Civil Code comprehends any
culpable act, which is blameworthy, when judged
by accepted legal standards. "The Idea thus
expressed is undoubtedly board enough to include
any rational conception of liability for the tortious
acts likely to be developed in any society." (Street,
J. in Daywalt vs. Corporacion de PP. Agustinos
Recoletos, 39 Phil. 587, 600). See article 38, Civil
Code and the ruling that "the infant tortfeasor is
liable in a civil action to the injured person in the
same manner and to the same extent as an adult"
(27 Am. Jur. 812 cited by Bocobo, J., in Magtibay
vs. Tiangco, 74 Phil. 576, 579).
Separate Opinions
AQUINO, J, concurring:
Article 2176 of the Civil Code comprehends any
culpable act, which is blameworthy, when judged
by accepted legal standards. "The Idea thus
expressed is undoubtedly board enough to include
any rational conception of liability for the tortious
acts likely to be developed in any society." (Street,
J. in Daywalt vs. Corporacion de PP. Agustinos
Recoletos, 39 Phil. 587, 600). See article 38, Civil
Code and the ruling that "the infant tortfeasor is
liable in a civil action to the injured person in the
same manner and to the same extent as an adult"
(27 Am. Jur. 812 cited by Bocobo, J., in Magtibay
vs. Tiangco, 74 Phil. 576, 579).
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-24837 June 27, 1968
JULIAN C. SINGSON and RAMONA DEL
CASTILLO, plaintiffs,
vs.
BANK OF THE PHILIPPINE ISLANDS and
SANTIAGO FREIXAS, in his capacity as
President of the said Bank, defendants.
Gil B. Galang for plaintiffs.
Aviado and Aranda for defendants.
CONCEPCION, C.J.:
Appeal by plaintiffs, Julian Singson and his wife,
Ramona del Castillo, from a decision of the Court
of First Instance of Manila dismissing their
complaint against defendants herein, the Bank of
the Philippine Islands and Santiago Freixas.
It appears that Singson, was one of the defendants
in civil case No. 23906 of the Court of First
Instance, Manila, in which judgment had been
rendered sentencing him and his co-defendants
therein, namely, Celso Lobregat and Villa-Abrille &
Co., to pay the sum of P105,539.56 to the plaintiff
therein, Philippine Milling Co. Singson and
Lobregat had seasonably appealed from said
judgment, but not Villa-Abrille & Co., as against
which said judgment, accordingly, became final
and executory. In due course, a writ of
garnishment was subsequently served upon the
Bank of the Philippine Islands — in which the
Singsons had a current account — insofar as Villa-
Abrille's credits against the Bank were concerned.
What happened thereafter is set forth in the
decision appealed from, from which we quote:
35
Upon receipt of the said Writ of
Garnishment, a clerk of the bank in charge
of all matters of execution and
garnishment, upon reading the name of
the plaintiff herein in the title of the Writ of
Garnishment as a party defendants,
without further reading the body of the said
garnishment and informing himself that
said garnishment was merely intended for
the deposits of defendant Villa-Abrille &
Co., Valentin Teus, Fernando F. de Villa-
Abrille and Joaquin Bona, prepared a letter
for the signature of the President of the
Bank informing the plaintiff Julian C.
Singson of the garnishment of his deposits
by the plaintiff in that case. Another letter
was also prepared and signed by the said
President of the Bank for the Special
Sheriff dated April 17, 1963.
Subsequently, two checks issued by the
plaintiff Julian C. Singson, one for the
amount of P383 in favor of B. M. Glass
Service dated April 16, 1963 and bearing
No. C-424852, and check No. C-394996
for the amount of P100 in favor of the Lega
Corporation, and drawn against the said
Bank, were deposited by the said drawers
with the said bank. Believing that the
plaintiff Singson, the drawer of the check,
had no more control over the balance of
his deposits in the said bank, the checks
were dishonored and were refused
payment by the said bank. After the first
check was returned by the bank to the B.
M. Glass Service, the latter wrote plaintiff
Julian C. Singson a letter, dated April 19,
1963, advising him that his check for
P383.00 bearing No. C-424852 was not
honored by the bank for the reason that his
account therein had already been
garnished. The said B. M. Glass Service
further stated in the said letter that they
were constrained to close his credit
account with them. In view thereof, plaintiff
Julian C. Singson wrote the defendant
bank a letter on April 19, 1963, claiming
that his name was not included in the Writ
of Execution and Notice of Garnishment,
which was served upon the bank. The
defendant President Santiago Freixas of
the said bank took steps to verify this
information and after having confirmed the
same, apologized to the plaintiff Julian C.
Singson and wrote him a letter dated April
22, 1963, requesting him to disregard their
letter of April 17, 1963, and that the action
of garnishment from his account had
already been removed. A similar letter was
written by the said official of the bank on
April 22, 1963 to the Special Sheriff
informing him that his letter dated April 17,
1963 to the said Special Sheriff was
considered cancelled and that they had
already removed the Notice of
Garnishment from plaintiff Singson's
account. Thus, the defendants lost no time
to rectify the mistake that had been
inadvertently committed, resulting in the
temporary freezing of the account of the
plaintiff with the said bank for a short time.
xxx xxx xxx
On May 8, 1963, the Singsong commenced the
present action against the Bank and its president,
Santiago Freixas, for damages1 in consequence of
said illegal freezing of plaintiffs' account.
1äw phï1.ñët
After appropriate proceedings, the Court of First
Instance of Manila rendered judgment dismissing
the complaint upon the ground that plaintiffs
cannot recover from the defendants upon the
basis of a quasi-delict, because the relation
between the parties is contractual in nature;
because this case does not fall under Article 2219
of our Civil Code, upon which plaintiffs rely; and
because plaintiffs have not established the amount
of damages allegedly sustained by them.
The lower court held that plaintiffs' claim for
damages cannot be based upon a tort or quasi-
delict, their relation with the defendants being
contractual in nature. We have repeatedly held,
however, that the existence of a contract between
the parties does not bar the commission of a tort
by the one against the order and the consequent
recovery of damages therefor.2 Indeed, this view
has been, in effect, reiterated in a comparatively
recent case. Thus, in Air France vs.
Carrascoso,3 involving an airplane passenger
who, despite his first-class ticket, had been
illegally ousted from his first-class accommodation
and compelled to take a seat in the tourist
compartment, was held entitled to recover
damages from the air-carrier, upon the ground of
tort on the latter's part, for, although the relation
between a passenger and a carrier is "contractual
both in origin and nature ... the act that breaks the
contract may also be a tort".
In view, however, of the facts obtaining in the case
at bar, and considering, particularly, the
circumstance, that the wrong done to the plaintiff
was remedied as soon as the President of the
bank realized the mistake he and his subordinate
employee had committed, the Court finds that an
36
award of nominal damages — the amount of which
need not be proven4 — in the sum of P1,000, in
addition to attorney's fees in the sum of P500,
would suffice to vindicate plaintiff's rights.5
WHEREFORE, the judgment appealed from is
hereby reversed, and another one shall be entered
sentencing the defendant Bank of the Philippine
Islands to pay to the plaintiffs said sums of P1,000,
as nominal damages, and P500, as attorney's
fees, apart from the costs. It is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Zaldivar,
Sanchez, Castro and Angeles, JJ., concur.
Fernando, J., took no part.
EN BANC
G.R. No. 129029 April 3, 2000
RAFAEL REYES TRUCKING
CORPORATION, petitioner,
vs.
PEOPLE OF THE PHILIPPINES and ROSARIO
P. DY (for herself and on behalf of the minors
Maria Luisa, Francis Edward, Francis Mark and
Francis Rafael, all surnamed Dy), respondents.
PARDO, J.:
The case is an appeal via certiorari from the
amended decision 1 of the Court of
Appeals2 affirming the decision and supplemental
decision of the trial court,3 as follows:
IN VIEW OF THE FOREGOING, judgment
is hereby rendered dismissing the appeals
interposed by both accused and Reyes
Trucking Corporation and affirming the
Decision and Supplemental Decision
dated June 6, 1992 and October 26, 1992
respectively.
SO ORDERED.4
The facts are as follows:
On October 10, 1989, Provincial Prosecutor
Patricio T. Durian of Isabela filed with the Regional
Trial Court, Isabela, Branch 19, Cauayan an
amended information charging Romeo Dunca y de
Tumol with reckless imprudence resulting in
double homicide and damage to property, reading
as follows:
That on or about the 20th day of June,
1989, in the Municipality of Cauayan,
Province of Isabela, Philippines, and within
the jurisdiction of this Honorable Court, the
said accused being the driver and person-
in-charge of a Trailer Truck Tractor
bearing Plate No. N2A-867 registered in
the name of Rafael Reyes Trucking
Corporation, with a load of 2,000 cases of
empty bottles of beer grande, willfully,
unlawfully and feloniously drove and
operated the same while along the
National Highway of Barangay Tagaran, in
said Municipality, in a negligent, careless
and imprudent manner, without due regard
to traffic laws, rules and ordinances and
without taking the necessary precautions
to prevent injuries to persons and damage
to property, causing by such negligence,
carelessness and imprudence the said
trailer truck to hit and bump a Nissan Pick-
up bearing Plate No. BBG-957 driven by
Feliciano Balcita and Francisco Dy, Jr., @
Pacquing, due to irreversible shock,
internal and external hemorrhage and
multiple injuries, open wounds, abrasions,
and further causing damages to the heirs
of Feliciano Balcita in the amount of
P100,000.00 and to the death of Francisco
Dy, Jr.; @ Pacquing and damages to his
Nissan Pick-Up bearing Plate No. BBG-
957 in the total amount of P2,000,000.00.
CONTRARY TO LAW.
Cauayan, Isabela, October 10, 1989.
(Sgd.) FAUSTO C. CABANTAC
Third Assistant Provincial Prosecutor
Upon arraignment on October 23, 1989, the
accused entered a plea of not guilty. On the same
occasion, the offended parties (Rosario P. Dy and
minor children and Angelina M. Balcita and minor
son Paolo) made a reservation to file a separate
civil action against the accused arising from the
offense charged.5 On November 29, 1989, the
offended parties actually filed with the Regional
Trial Court, Isabela, Branch 19, Cauayan a
complaint against petitioner Rafael Reyes
Trucking Corporation, as employer of driver
Romeo Dunca y de Tumol, based on quasi delict.
The petitioner settled the claim of the heirs of
Feliciano Balcita (the driver of the other vehicle
37
involved in the accident). The private respondents
opted to pursue the criminal action but did not
withdraw the civil case quasi ex delicto they filed
against petitioner. On December 15, 1989, private
respondents withdrew the reservation to file a
separate civil action against the accused and
manifested that they would prosecute the civil
aspect ex delicto in the criminal action.6 However,
they did not withdraw the separate civil action
based on quasi delict against petitioner as
employer arising from the same act or omission of
the accused driver.7
Upon agreement of the parties, the trial court
consolidated both criminal and civil cases and
conducted a joint trial of the same.
The facts, as found by the trial court, which appear
to be undisputed, are as follows:
The defendant Rafael Reyes Trucking
Corporation is a domestic corporation
engaged in the business of transporting
beer products for the San Miguel
Corporation (SMC for Short) from the
latter's San Fernando, Pampanga plant to
its various sales outlets in Luzon. Among
its fleets of vehicles for hire is the white
truck trailer described above driven by
Romeo Dunca y Tumol, a duly licensed
driver. Aside from the Corporation's
memorandum to all its drivers and helpers
to physically inspect their vehicles before
each trip (Exh. 15, pars. 4 & 5), the SMC's
Traffic Investigator-Inspector certified the
roadworthiness of this White Truck trailer
prior to June 20, 1989 (Exh. 17). In
addition to a professional driver's license,
it also conducts a rigid examination of all
driver applicants before they are hired.
In the early morning of June 20, 1989, the
White Truck driven by Dunca left
Tuguegarao, Cagayan bound to San
Fernando, Pampanga loaded with 2,000
cases of empty beer "Grande" bottles.
Seated at the front right seat beside him
was Ferdinand Domingo, his truck helper
("pahinante" in Pilipino). At around 4:00
o'clock that same morning while the truck
was descending at a slight downgrade
along the national road at Tagaran,
Cauayan, Isabela, it approached a
damaged portion of the road covering the
full width of the truck's right lane going
south and about six meters in length.
These made the surface of the road
uneven because the potholes were about
five to six inches deep. The left lane
parallel to this damaged portion is smooth.
As narrated by Ferdinand Domingo, before
approaching the potholes, he and Dunca
saw the Nissan with its headlights on
coming from the opposite direction. They
used to evade this damaged road by taking
the left lance but at that particular moment,
because of the incoming vehicle, they had
to run over it. This caused the truck to
bounce wildly. Dunca lost control of the
wheels and the truck swerved to the left
invading the lane of the Nissan. As a
result, Dunca's vehicle rammed the
incoming Nissan dragging it to the left
shoulder of the road and climbed a ridge
above said shoulder where it finally
stopped. (see Exh. A-5, p. 8, record). The
Nissan was severely damaged (Exhs. A-7,
A-8, A-9 and A-14, pp. 9-11 record), and
its two passengers, namely: Feliciano
Balcita and Francisco Dy, Jr. died instantly
(Exh. A-19) from external and internal
hemorrhage and multiple fractures (pp. 15
and 16, record).
For the funeral expenses of Francisco Dy,
Jr. her widow spent P651,360.00 (Exh. I-
3). At the time of his death he was 45 years
old. He was the President and Chairman
of the Board of the Dynamic Wood
Products and Development Corporation
(DWPC), a wood processing
establishment, from which he was
receiving an income of P10,000.00 a
month. (Exh. D). In the Articles of
Incorporation of the DWPC, the spouses
Francisco Dy, Jr. and Rosario Perez Dy
appear to be stockholders of 10,000
shares each with par value of P100.00 per
share out of its outstanding and
subscribed capital stock of 60,000 shares
valued at P6,000,000.00 (Exhs. K-1 & 10-
B). Under its 1988 Income Tax Returns
(Exh. J) the DWPC had a taxable net
income of P78,499.30 (Exh. J). Francisco
Dy, Jr. was a La Salle University graduate
in Business Administration, past president
of the Pasay Jaycees, National Treasurer
and President of the Philippine Jaycees in
1971 and 1976, respectively, and World
Vice-President of Jaycees International in
1979. He was also the recipient of
numerous awards as a civic leader (Exh.
C). His children were all studying in
prestigious schools and spent about
P180,000.00 for their education in 1988
alone (Exh. H-4).
38
 As stated earlier, the plaintiffs'
procurement of a writ of attachment of the
properties of the Corporation was declared
illegal by the Court of Appeals. It was
shown that on December 26, 1989, Deputy
Sheriff Edgardo Zabat of the RTC at San
Fernando, Pampanga, attached six units
of Truck Tractors and trailers of the
Corporation at its garage at San Fernando,
Pampanga. These vehicles were kept
under PC guard by the plaintiffs in said
garage thus preventing the Corporation to
operate them. However, on December 28,
1989, the Court of Appeals dissolved the
writ (p. 30, record) and on December 29,
1989, said Sheriff reported to this Court
that the attached vehicles were taken by
the defendant's representative, Melita
Manapil (Exh. O, p. 31, record). The
defendant's general Manager declared
that it lost P21,000.00 per day for the non-
operation of the six units during their
attachment (p. 31, t.s.n., Natividad C.
Babaran, proceedings on December 10,
1990).8
On June 6, 1992, the trial court rendered a joint
decision, the dispositive portion of which reads as
follows:
WHEREFORE, in view of the foregoing
considerations judgment is hereby
rendered:
1. Finding the accused Romeo Dunca y de
Tumol guilty beyond reasonable doubt of
the crime of Double Homicide through
Reckless Imprudence with violation of the
Motor Vehicle Law (Rep. Act No. 4136),
and appreciating in his favor the mitigating
circumstance of voluntary surrender
without any aggravating circumstance to
offset the same, the Court hereby
sentences him to suffer two (2)
indeterminate penalties of four months and
one day of arresto mayor as minimum to
three years, six months and twenty days
as maximum; to indemnify the Heirs of
Francisco Dy. Jr. in the amount of
P3,000,000.00 as compensatory
damages, P1,000,000.00 as moral
damages, and P1,030,000.00 as funeral
expenses;
2. Ordering the plaintiff in Civil Case No.
Br. 19-424 to pay the defendant therein
actual damages in the amount of
P84,000.00; and
3. Ordering the dismissal of the complaint
in Civil Case No. Br. 19-424.
No pronouncement as to costs.
SO ORDERED.
Cauayan, Isabela, June 6, 1992.
(Sgd.) ARTEMIO R. ALIVIA
Regional Trial Judge9
On September 3, 1992, petitioner and the accused
filed a notice of appeal from the joint decision. 10
On the other hand, private respondents moved for
amendment of the dispositive portion of the joint
decision so as to hold petitioner subsidiarily liable
for the damages awarded to the private
respondents in the event of insolvency of the
accused. 11
On October 26, 1992, the trial court rendered a
supplemental decision amending the dispositive
portion by inserting an additional paragraph
reading as follows:
2:A — Ordering the defendant Reyes
Trucking Corporation subsidiarily liable for
all the damages awarded to the heirs of
Francisco Dy, Jr., in the event of
insolvency of the accused but deducting
therefrom the damages of P84,000.00
awarded to said defendant in the next
preceding paragraph; and . . . 12
On November 12, 1992, petitioner filed with the
trial court a supplemental notice of appeal from the
supplemental decision. 13
During the pendency of the appeal, the accused
jumped bail and fled to a foreign country. By
resolution dated December 29, 1994, the Court of
Appeals dismissed the appeal of the accused in
the criminal case. 14
On January 6, 1997, the Court of Appeals
rendered an amended decision affirming that of
the trial court, as set out in the opening paragraph
of this decision. 15
On January 31, 1997, petitioner filed a motion for
reconsideration of the amended decision. 16
On April 21, 1997, the Court of Appeals denied
petitioner's motion for reconsideration for lack of
merit 17
39
Hence, this petition for review. 18
On July 21, 1997, the Court required respondents
to comment on the petition within ten (10) days
from notice. 19
On January 27, 1998, the Solicitor General filed his
comment. 20 On April 13, 1998, the Court granted
leave to petitioner to file a reply and noted the reply
it filed on March 11, 1998. 21
We now resolve to give due course to the petition
and decide the case.
Petitioner raises three (3) grounds for allowance of
the petition, which, however, boil down to two (2)
basic issues, namely:
1. May petitioner as owner of the truck
involved in the accident be held
subsidiarily liable for the damages
awarded to the offended parties in the
criminal action against the truck driver
despite the filing of a separate civil action
by the offended parties against the
employer of the truck driver?
2. May the Court award damages to the
offended parties in the criminal case
despite the filing of a civil action against
the employer of the truck driver; and in
amounts exceeding that alleged in the
information for reckless imprudence
resulting in homicide and damage to
property? 22
We grant the petition, resolving under the
circumstances pro hac vice to remand the cases
to the trial court for determination of the civil liability
of petitioner as employer of the accused driver in
the civil action quasi ex delicto re-opened for the
purpose.
In negligence cases, the aggrieved party has the
choice between (1) an action to enforce civil
liability arising from crime under Article 100 of the
Revised Penal Code; and (2) a separate action
for quasi delict under Article 2176 of the Civil Code
of the Philippines. Once the choice is made, the
injured party can not avail himself of any other
remedy because he may not recover damages
twice for the same negligent act or omission of the
accused. 23 This is the rule against double
recovery. 1âw phi 1.nêt
In other words, "the same act or omission can
create two kinds of liability on the part of the
offender, that is, civil liability ex delicto, and civil
liability quasi delicto" either of which "may be
enforced against the culprit, subject to the caveat
under Article 2177 of the Civil Code that the
offended party can not recover damages under
both types of liability." 24
In the instant case, the offended parties elected to
file a separate civil action for damages against
petitioner as employer of the accused, based
on quasi delict, under Article 2176 of the Civil
Code of the Philippines. Private respondents sued
petitioner Rafael Reyes Trucking Corporation, as
the employer of the accused, to be vicariously
liable for the fault or negligence of the latter. Under
the law, this vicarious liability of the employer is
founded on at least two specific provisions of law.
The first is expressed in Article 2176 in relation to
Article 2180 of the Civil Code, which would allow
an action predicated on quasi-delict to be
instituted by the injured party against the employer
for an act or omission of the employee and would
necessitate only a preponderance of evidence to
prevail. Here, the liability of the employer for the
negligent conduct of the subordinate is direct and
primary, subject to the defense of due diligence in
the selection and supervision of the employee.
The enforcement of the judgment against the
employer in an action based on Article 2176 does
not require the employee to be insolvent since the
nature of the liability of the employer with that of
the employee, the two being statutorily considered
joint tortfeasors, is solidary. 25 The second,
predicated on Article 103 of the Revised Penal
Code, provides that an employer may be held
subsidiarily civilly liable for a felony committed by
his employee in the discharge of his duty. This
liability attaches when the employee is convicted
of a crime done in the performance of his work and
is found to be insolvent that renders him unable to
properly respond to the civil liability adjudged. 26
As regards the first issue, the answer is in the
negative. Rafael Reyes Trucking Corporation, as
employer of the accused who has been adjudged
guilty in the criminal case for reckless imprudence,
can not be held subsidiarily liable because of the
filing of the separate civil action based on quasi
delict against it. In view of the reservation to file,
and the subsequent filing of the civil action for
recovery of civil liability, the same was not
instituted with the criminal action. Such separate
civil action was for recovery of damages under
Article 2176 of the Civil Code, arising from the
same act or omission of the accused. 27
Pursuant to the provision of Rule 111, Section 1,
paragraph 3 of the 1985 Rules of Criminal
40
Procedure, when private respondents, as
complainants in the criminal action, reserved the
right to file the separate civil action, they waived
other available civil actions predicated on the
same act or omission of the accused-driver. Such
civil action includes the recovery of indemnity
under the Revised Penal Code, and damages
under Articles 32, 33, and 34 of the Civil Code of
the Philippines arising from the same act or
omission of the accused. 28
The intention of private respondents to proceed
primarily and directly against petitioner as
employer of accused truck driver became clearer
when they did not ask for the dismissal of the civil
action against the latter based on quasi delict.
Consequently, the Court of Appeals and the trial
court erred in holding the accused civilly liable, and
petitioner-employer of the accused subsidiarily
liable for damages arising from crime (ex delicto)
in the criminal action as the offended parties in fact
filed a separate civil action against the employer
based on quasi delict resulting in the waiver of the
civil action ex delicto.
It might be argued that private respondents as
complainants in the criminal case withdrew the
reservation to file a civil action against the driver
(accused) and manifested that they would pursue
the civil liability of the driver in the criminal action.
However, the withdrawal is ineffective to reverse
the effect of the reservation earlier made because
private respondents did not withdraw the civil
action against petitioner based on quasi delict. In
such a case, the provision of Rule 111, Section 1,
paragraph 3 of the 1985 Rules on Criminal
Procedure is clear that the reservation to file or the
filing of a separate civil action results in a waiver of
other available civil actions arising from the same
act or omission of the accused. Rule 111, Section
1, paragraph 2 enumerated what are the civil
actions deemed waived upon such reservation or
filing, and one of which is the civil indemnity under
the Revised Penal Code. Rule 111, Section 1,
paragraph 3 of the 1985 Rules on Criminal
Procedure specifically provides:
A waiver of any of the civil actions
extinguishes the others. The institution of,
or the reservation of the right to file, any of
said civil actions separately waives the
others.
The rationale behind this rule is the avoidance of
multiple suits between the same litigants arising
out of the same act or omission of the offender.
The restrictive phraseology of the section under
consideration is meant to cover all kinds of civil
actions, regardless of their source in law, provided
that the action has for its basis the same act or
omission of the offender. 29
However, petitioner as defendant in the separate
civil action for damages filed against it, based
on quasi delict, may be held liable thereon. Thus,
the trial court grievously erred in dismissing
plaintiff's civil complaint. And the Court of Appeals
erred in affirming the trial court's decision.
Unfortunately private respondents did not appeal
from such dismissal and could not be granted
affirmative relief. 30
The Court, however, in exceptional cases has
relaxed the rules "in order to promote their
objectives and assist the parties in obtaining just,
speedy, and inexpensive determination of every
action or proceeding" 31 or exempted "a particular
case from the operation of the rules." 32
Invoking this principle, we rule that the trial court
erred in awarding civil damages in the criminal
case and in dismissing the civil action. Apparently
satisfied with such award, private respondent did
not appeal from the dismissal of the civil case.
However, petitioner did appeal. Hence, this case
should be remanded to the trial court so that it may
render decision in the civil case awarding
damages as may be warranted by the evidence. 33
With regard to the second issue, the award of
damages in the criminal case was improper
because the civil action for the recovery of civil
liability was waived in the criminal action by the
filing of a separate civil action against the
employer. As enunciated in Ramos
vs. Gonong, 34 "civil indemnity is not part of the
penalty for the crime committed." The only issue
brought before the trial court in the criminal action
is whether accused Romeo Dunca y de Tumol is
guilty of reckless imprudence resulting in homicide
and damage to property. The action for recovery
of civil liability is not included therein, but is
covered by the separate civil action filed against
the petitioner as employer of the accused truck-
driver.
In this case, accused-driver jumped bail pending
his appeal from his conviction. Thus, the judgment
convicting the accused became final and
executory, but only insofar as the penalty in the
criminal action is concerned. The damages
awarded in the criminal action was invalid because
of its effective waiver. The pronouncement was
void because the action for recovery of the civil
41
liability arising from the crime has been waived in
said criminal action.
With respect to the issue that the award of
damages in the criminal action exceeded the
amount of damages alleged in the amended
information, the issue is de minimis. At any rate,
the trial court erred in awarding damages in the
criminal case because by virtue of the reservation
of the right to bring a separate civil action or the
filing thereof, "there would be no possibility that the
employer would be held liable because in such a
case there would be no pronouncement as to the
civil liability of the accused. 35
As a final note, we reiterate that "the policy against
double recovery requires that only one action be
maintained for the same act or omission whether
the action is brought against the employee or
against his employer. 36 The injured party must
choose which of the available causes of action for
damages he will bring. 37
Parenthetically, the trial court found the accused
"guilty beyond reasonable doubt of the crime of
Double Homicide Through Reckless Imprudence
with violation of the Motor Vehicle Law (Rep. Act
No. 4136)". There is no such nomenclature of an
offense under the Revised Penal Code. Thus, the
trial court was misled to sentence the accused "to
suffer two (2) indeterminate penalties of four (4)
months and one (1) day of arresto mayor, as
minimum, to three (3) years, six (6) months and
twenty (20) days of prision correccional, as
maximum." This is erroneous because in reckless
imprudence cases, the actual penalty for criminal
negligence bears no relation to the individual
willfull crime or crimes committed, but is set in
relation to a whole class, or series of crimes. 38
Unfortunately, we can no longer correct this
judgment even if erroneous, as it is, because it has
become final and executory.
Under Article 365 of the Revised Penal Code,
criminal negligence "is treated as a mere quasi
offense, and dealt with separately from willful
offenses. It is not a question of classification or
terminology. In intentional crimes, the act itself is
punished; in negligence or imprudence, what is
principally penalized is the mental attitude or
condition behind the act, the dangerous
recklessness, lack of care or foresight,
the imprudencia punible. Much of the confusion
has arisen from the common use of such
descriptive phrase as "homicide through reckless
imprudence", and the like; when the strict technical
sense is, more accurately, "reckless imprudence
resulting in homicide"; or "simple imprudence
causing damages to property"." 39
There is need, therefore, to rectify the designation
of the offense without disturbing the imposed
penalty for the guidance of bench and bar in strict
adherence to precedent.
WHEREFORE, the Court GRANTS the petition
and SETS ASIDE the amended decision and
resolution of the Court of Appeals in CA-G.R. CR
No. 14448, promulgated on January 6, 1997, and
the joint decision of the Regional Trial Court,
Isabela, Branch 19, Cauayan, in Criminal Case
No. Br. 19-311 and Civil Case No. Br. 19-424,
dated June 6, 1992.
IN LIEU THEREOF, the Court renders judgment
as follows:
(1) In Criminal Case No. Br. 19-311, the
Court declares the accused Romeo Dunca
y de Tumol guilty beyond reasonable
doubt of reckless imprudence resulting in
homicide and damage to property, defined
and penalized under Article 365,
paragraph 2 of the Revised Penal Code,
with violation of the automobile law (R.A.
No. 4136, as amended), and sentences
him to suffer two (2) indeterminate
penalties of four (4) months and one (1)
day of arresto mayor, as minimum, to
three (3) years, six (6) months and twenty
(20) days ofprision correccional, as
maximum, 40 without indemnity, and to pay
the costs, and
(2) In Civil Case No. Br. 19-424, the Court
orders the case re-opened to determine
the liability of the defendant Rafael Reyes
Trucking Corporation to plaintiffs and that
of plaintiffs on defendant's counterclaim.
No costs in this instance.
SO ORDERED.
Bellosillo, Melo, Kapunan, Buena, Gonzaga-
Reyes, Ynares-Santiago and De Leon, Jr., JJ.,
concur.
Davide, Jr., C.J., Please see dissenting opinion.
Puno, J., I concur but pro hac vice.
Vitug, J., Please see separate opinion.
Mendoza, J., Please see my dissent.
Panganiban, J., In the result.
Quisumbing, J., Concur in separate opinion of J.
Vitug.
42
Purisima, J., I join in the dissent of Mr. Justice
Mendoza.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 150157 January 25, 2007
MAURICIO MANLICLIC and PHILIPPINE
RABBIT BUS LINES, INC., Petitioners,
vs.
MODESTO CALAUNAN, Respondent.
DECISION
CHICO-NAZARIO, J.:
Assailed before Us is the decision1 of the Court of
Appeals in CA-G.R. CV No. 55909 which affirmed
in toto the decision2 of the Regional Trial Court
(RTC) of Dagupan City, Branch 42, in Civil Case
No. D-10086, finding petitioners Mauricio Manliclic
and Philippine Rabbit Bus Lines, Inc. (PRBLI)
solidarily liable to pay damages and attorney’s
fees to respondent Modesto Calaunan.
The factual antecedents are as follows:
The vehicles involved in this case are: (1)
Philippine Rabbit Bus No. 353 with plate number
CVD-478, owned by petitioner PRBLI and driven
by petitioner Mauricio Manliclic; and (2) owner-
type jeep with plate number PER-290, owned by
respondent Modesto Calaunan and driven by
Marcelo Mendoza.
At around 6:00 to 7:00 o’clock in the morning of 12
July 1988, respondent Calaunan, together with
Marcelo Mendoza, was on his way to Manila from
Pangasinan on board his owner-type jeep. The
Philippine Rabbit Bus was likewise bound for
Manila from Concepcion, Tarlac. At approximately
Kilometer 40 of the North Luzon Expressway in
Barangay Lalangan, Plaridel, Bulacan, the two
vehicles collided. The front right side of the
Philippine Rabbit Bus hit the rear left side of the
jeep causing the latter to move to the shoulder on
the right and then fall on a ditch with water
resulting to further extensive damage. The bus
veered to the left and stopped 7 to 8 meters from
point of collision.
Respondent suffered minor injuries while his driver
was unhurt. He was first brought for treatment to
the Manila Central University Hospital in Kalookan
City by Oscar Buan, the conductor of the Philippine
Rabbit Bus, and was later transferred to the
Veterans Memorial Medical Center.
By reason of such collision, a criminal case was
filed before the RTC of Malolos, Bulacan, charging
petitioner Manliclic with Reckless Imprudence
Resulting in Damage to Property with Physical
Injuries, docketed as Crim. Case No. 684-M-89.
Subsequently on 2 December 1991, respondent
filed a complaint for damages against petitioners
Manliclic and PRBLI before the RTC of Dagupan
City, docketed as Civil Case No. D-10086. The
criminal case was tried ahead of the civil case.
Among those who testified in the criminal case
were respondent Calaunan, Marcelo Mendoza
and Fernando Ramos.
In the civil case (now before this Court), the parties
admitted the following:
1. The parties agreed on the capacity of
the parties to sue and be sued as well as
the venue and the identities of the vehicles
involved;
2. The identity of the drivers and the fact
that they are duly licensed;
3. The date and place of the vehicular
collision;
4. The extent of the injuries suffered by
plaintiff Modesto Calaunan and the
existence of the medical certificate;
5. That both vehicles were going towards
the south; the private jeep being ahead of
the bus;
6. That the weather was fair and the road
was well paved and straight, although
there was a ditch on the right side where
the jeep fell into.3
When the civil case was heard, counsel for
respondent prayed that the transcripts of
stenographic notes (TSNs)4 of the testimonies of
respondent Calaunan, Marcelo Mendoza and
Fernando Ramos in the criminal case be received
in evidence in the civil case in as much as these
witnesses are not available to testify in the civil
case.
43
Francisco Tuliao testified that his brother-in-law,
respondent Calaunan, left for abroad sometime in
November, 1989 and has not returned since then.
Rogelio Ramos took the stand and said that his
brother, Fernando Ramos, left for Amman, Jordan,
to work. Rosalia Mendoza testified that her
husband, Marcelo Mendoza, left their residence to
look for a job. She narrated that she thought her
husband went to his hometown in Panique, Tarlac,
when he did not return after one month. She went
to her husband’s hometown to look for him but she
was informed that he did not go there.1awphil.net
The trial court subpoenaed the Clerk of Court of
Branch 8, RTC, Malolos, Bulacan, the court where
Criminal Case No. 684-M-89 was tried, to bring the
TSNs of the testimonies of respondent
Calaunan,5 Marcelo Mendoza6 and Fernando
Ramos7 in said case, together with other
documentary evidence marked therein. Instead of
the Branch Clerk of Court, it was Enrique Santos
Guevara, Court Interpreter, who appeared before
the court and identified the TSNs of the three
afore-named witnesses and other pertinent
documents he had brought.8 Counsel for
respondent wanted to mark other TSNs and
documents from the said criminal case to be
adopted in the instant case, but since the same
were not brought to the trial court, counsel for
petitioners compromised that said TSNs and
documents could be offered by counsel for
respondent as rebuttal evidence.
For the defendants, petitioner Manliclic and bus
conductor Oscar Buan testified. The TSN9 of the
testimony of Donato Ganiban, investigator of the
PRBLI, in Criminal Case No. 684-M-89 was
marked and allowed to be adopted in the civil case
on the ground that he was already dead.
Respondent further marked, among other
documents, as rebuttal evidence, the TSNs10 of
the testimonies of Donato Ganiban, Oscar Buan
and petitioner Manliclic in Criminal Case No. 684-
M-89.
The disagreement arises from the question: Who
is to be held liable for the collision?
Respondent insists it was petitioner Manliclic who
should be liable while the latter is resolute in
saying it was the former who caused the smash
up.
The versions of the parties are summarized by the
trial court as follows:
The parties differed only on the manner the
collision between the two (2) vehicles took place.
According to the plaintiff and his driver, the jeep
was cruising at the speed of 60 to 70 kilometers
per hour on the slow lane of the expressway when
the Philippine Rabbit Bus overtook the jeep and in
the process of overtaking the jeep, the Philippine
Rabbit Bus hit the rear of the jeep on the left side.
At the time the Philippine Rabbit Bus hit the jeep,
it was about to overtake the jeep. In other words,
the Philippine Rabbit Bus was still at the back of
the jeep when the jeep was hit. Fernando Ramos
corroborated the testimony of the plaintiff and
Marcelo Mendoza. He said that he was on another
jeep following the Philippine Rabbit Bus and the
jeep of plaintiff when the incident took place. He
said, the jeep of the plaintiff overtook them and the
said jeep of the plaintiff was followed by the
Philippine Rabbit Bus which was running very fast.
The bus also overtook the jeep in which he was
riding. After that, he heard a loud sound. He saw
the jeep of the plaintiff swerved to the right on a
grassy portion of the road. The Philippine Rabbit
Bus stopped and they overtook the Philippine
Rabbit Bus so that it could not moved (sic),
meaning they stopped in front of the Philippine
Rabbit Bus. He testified that the jeep of plaintiff
swerved to the right because it was bumped by the
Philippine Rabbit bus from behind.
Both Mauricio Manliclic and his driver, Oscar Buan
admitted that the Philippine Rabbit Bus bumped
the jeep in question. However, they explained that
when the Philippine Rabbit bus was about to go to
the left lane to overtake the jeep, the latter jeep
swerved to the left because it was to overtake
another jeep in front of it. Such was their testimony
before the RTC in Malolos in the criminal case and
before this Court in the instant case. [Thus, which
of the two versions of the manner how the collision
took place was correct, would be determinative of
who between the two drivers was negligent in the
operation of their respective vehicles.]11
Petitioner PRBLI maintained that it observed and
exercised the diligence of a good father of a family
in the selection and supervision of its employee,
specifically petitioner Manliclic.
On 22 July 1996, the trial court rendered its
decision in favor of respondent Calaunan and
against petitioners Manliclic and PRBLI. The
dispositive portion of its decision reads:
WHEREFORE, judgment is rendered in favor of
the plaintiff and against the defendants ordering
the said defendants to pay plaintiff jointly and
solidarily the amount of P40,838.00 as actual
44
damages for the towing as well as the repair and
the materials used for the repair of the jeep in
question; P100,000.00 as moral damages and
another P100,000.00 as exemplary damages
and P15,000.00 as attorney’s fees, including
appearance fees of the lawyer. In addition, the
defendants are also to pay costs.12
Petitioners appealed the decision via Notice of
Appeal to the Court of Appeals.13
In a decision dated 28 September 2001, the Court
of Appeals, finding no reversible error in the
decision of the trial court, affirmed it in all
respects.14
Petitioners are now before us by way of petition for
review assailing the decision of the Court of
Appeals. They assign as errors the following:
I requisites must be satisfied: (a) the witness is dead
THE COURT OF APPEALS ERRED ON A
QUESTION OF LAW IN AFFIRMING THE TRIAL
COURT’S QUESTIONABLE ADMISSION IN
EVIDENCE OF THE TSN’s AND OTHER
DOCUMENTS PRESENTED IN THE CRIMINAL
CASE.
II
THE COURT OF APPEALS ERRED ON A
QUESTION OF LAW IN AFFIRMING THE TRIAL
COURT’S RELIANCE ON THE VERSION OF
THE RESPONDENT ON HOW THE ACCIDENT
SUPPOSEDLY OCCURRED.
III
THE COURT OF APPEALS ERRED ON A
QUESTION OF LAW IN AFFIRMING THE TRIAL
COURT’S UNFAIR DISREGARD OF HEREIN
PETITIONER PRBL’s DEFENSE OF EXERCISE
OF DUE DILIGENCE IN THE SELECTION AND
SUPERVISION OF ITS EMPLOYEES.
IV
THE COURT OF APPEALS ERRED ON A
QUESTION OF LAW IN AFFIRMING THE TRIAL
COURT’S QUESTIONABLE AWARD OF
DAMAGES AND ATTORNEY’S FEE.
With the passing away of respondent Calaunan
during the pendency of this appeal with this Court,
we granted the Motion for the Substitution of
Respondent filed by his wife, Mrs. Precila Zarate
Vda. De Calaunan, and children, Virgilio
Calaunan, Carmelita Honeycomb, Evelyn
Calaunan, Marko Calaunan and Liwayway
Calaunan.15
In their Reply to respondent’s Comment,
petitioners informed this Court of a Decision16 of
the Court of Appeals acquitting petitioner Manliclic
of the charge17 of Reckless Imprudence Resulting
in Damage to Property with Physical Injuries
attaching thereto a photocopy thereof.
On the first assigned error, petitioners argue that
the TSNs containing the testimonies of respondent
Calaunan,18Marcelo Mendoza19 and Fernando
Ramos20 should not be admitted in evidence for
failure of respondent to comply with the requisites
of Section 47, Rule 130 of the Rules of Court.
For Section 47, Rule 13021 to apply, the following
or unable to testify; (b) his testimony or deposition
was given in a former case or proceeding, judicial
or administrative, between the same parties or
those representing the same interests; (c) the
former case involved the same subject as that in
the present case, although on different causes of
action; (d) the issue testified to by the witness in
the former trial is the same issue involved in the
present case; and (e) the adverse party had an
opportunity to cross-examine the witness in the
former case.22
Admittedly, respondent failed to show the
concurrence of all the requisites set forth by the
Rules for a testimony given in a former case or
proceeding to be admissible as an exception to the
hearsay rule. Petitioner PRBLI, not being a party
in Criminal Case No. 684-M-89, had no
opportunity to cross-examine the three witnesses
in said case. The criminal case was filed
exclusively against petitioner Manliclic, petitioner
PRBLI’s employee. The cases dealing with the
subsidiary liability of employers uniformly declare
that, strictly speaking, they are not parties to the
criminal cases instituted against their employees.23
Notwithstanding the fact that petitioner PRBLI was
not a party in said criminal case, the testimonies of
the three witnesses are still admissible on the
ground that petitioner PRBLI failed to object on
their admissibility.
It is elementary that an objection shall be made at
the time when an alleged inadmissible document
is offered in evidence; otherwise, the objection
shall be treated as waived, since the right to object
is merely a privilege which the party may waive.
45
Thus, a failure to except to the evidence because
it does not conform to the statute is a waiver of the
provisions of the law. Even assuming ex gratia
argumenti that these documents are inadmissible
for being hearsay, but on account of failure to
object thereto, the same may be admitted and
considered as sufficient to prove the facts therein
asserted.24 Hearsay evidence alone may be
insufficient to establish a fact in a suit but, when no
objection is made thereto, it is, like any other
evidence, to be considered and given the
importance it deserves.25
In the case at bar, petitioner PRBLI did not object
to the TSNs containing the testimonies of
respondent Calaunan, Marcelo Mendoza and
Fernando Ramos in the criminal case when the
same were offered in evidence in the trial court. In
fact, the TSNs of the testimonies of Calaunan and
Mendoza were admitted by both
petitioners.26 Moreover, petitioner PRBLI even
offered in evidence the TSN containing the
testimony of Donato Ganiban in the criminal case.
If petitioner PRBLI argues that the TSNs of the
testimonies of plaintiff’s witnesses in the criminal
case should not be admitted in the instant case,
why then did it offer the TSN of the testimony of
Ganiban which was given in the criminal case? It
appears that petitioner PRBLI wants to have its
cake and eat it too. It cannot argue that the TSNs
of the testimonies of the witnesses of the adverse
party in the criminal case should not be admitted
and at the same time insist that the TSN of the
testimony of the witness for the accused be
admitted in its favor. To disallow admission in
evidence of the TSNs of the testimonies of
Calaunan, Marcelo Mendoza and Fernando
Ramos in the criminal case and to admit the TSN
of the testimony of Ganiban would be unfair.
We do not subscribe to petitioner PRBLI’s
argument that it will be denied due process when
the TSNs of the testimonies of Calaunan, Marcelo
Mendoza and Fernando Ramos in the criminal
case are to be admitted in the civil case. It is too
late for petitioner PRBLI to raise denial of due
process in relation to Section 47, Rule 130 of the
Rules of Court, as a ground for objecting to the
admissibility of the TSNs. For failure to object at
the proper time, it waived its right to object that the
TSNs did not comply with Section 47.
In Mangio v. Court of Appeals,27 this Court,
through Associate Justice Reynato S.
Puno,28 admitted in evidence a TSN of the
testimony of a witness in another case despite
therein petitioner’s assertion that he would be
denied due process. In admitting the TSN, the
Court ruled that the raising of denial of due process
in relation to Section 47, Rule 130 of the Rules of
Court, as a ground for objecting to the admissibility
of the TSN was belatedly done. In so doing, therein
petitioner waived his right to object based on said
ground.
Petitioners contend that the documents in the
criminal case should not have been admitted in the
instant civil case because Section 47 of Rule 130
refers only to "testimony or deposition." We find
such contention to be untenable. Though said
section speaks only of testimony and deposition, it
does not mean that documents from a former case
or proceeding cannot be admitted. Said
documents can be admitted they being part of the
testimonies of witnesses that have been admitted.
Accordingly, they shall be given the same weight
as that to which the testimony may be entitled.29
On the second assigned error, petitioners contend
that the version of petitioner Manliclic as to how
the accident occurred is more credible than
respondent’s version. They anchor their
contention on the fact that petitioner Manliclic was
acquitted by the Court of Appeals of the charge of
Reckless Imprudence Resulting in Damage to
Property with Physical Injuries.
To be resolved by the Court is the effect of
petitioner Manliclic’s acquittal in the civil case.
From the complaint, it can be gathered that the civil
case for damages was one arising from, or based
on, quasi-delict.30 Petitioner Manliclic was sued for
his negligence or reckless imprudence in causing
the collision, while petitioner PRBLI was sued for
its failure to exercise the diligence of a good father
in the selection and supervision of its employees,
particularly petitioner Manliclic. The allegations
read:
"4. That sometime on July 12, 1988 at
around 6:20 A.M. plaintiff was on board the
above-described motor vehicle travelling
at a moderate speed along the North
Luzon Expressway heading South towards
Manila together with MARCELO
MENDOZA, who was then driving the
same;
"5. That approximately at kilometer 40 of
the North Luzon Express Way, the above-
described motor vehicle was suddenly
bumped from behind by a Philippine
Rabbit Bus with Body No. 353 and with
plate No. CVD 478 then being driven by
one Mauricio Manliclic of San Jose,
Concepcion, Tarlac, who was then
46
 travelling recklessly at a very fast speed
and had apparently lost control of his
vehicle;
"6. That as a result of the impact of the
collision the above-described motor
vehicle was forced off the North Luzon
Express Way towards the rightside where
it fell on its driver’s side on a ditch, and that
as a consequence, the above-described
motor vehicle which maybe valued at
EIGHTY THOUSAND PESOS (P80,000)
was rendered a total wreck as shown by
pictures to be presented during the pre-
trial and trial of this case;
"7. That also as a result of said incident,
plaintiff sustained bodily injuries which
compounded plaintiff’s frail physical
condition and required his hospitalization
from July 12, 1988 up to and until July 22,
1988, copy of the medical certificate is
hereto attached as Annex "A" and made
an integral part hereof;
"8. That the vehicular collision resulting in
the total wreckage of the above-described
motor vehicle as well as bodily (sic)
sustained by plaintiff, was solely due to the
reckless imprudence of the defendant
driver Mauricio Manliclic who drove his
Philippine Rabbit Bus No. 353 at a fast
speed without due regard or observance of
existing traffic rules and regulations;
"9. That defendant Philippine Rabbit Bus
Line Corporation failed to exercise the
diligence of a good father of (sic) family in
the selection and supervision of its drivers;
x x x"31
Can Manliclic still be held liable for the collision
and be found negligent notwithstanding the
declaration of the Court of Appeals that there was
an absence of negligence on his part?
In exonerating petitioner Manliclic in the criminal
case, the Court of Appeals said:
To the following findings of the court a quo, to wit:
that accused-appellant was negligent "when the
bus he was driving bumped the jeep from behind";
that "the proximate cause of the accident was his
having driven the bus at a great speed while
closely following the jeep"; x x x
We do not agree.
The swerving of Calaunan’s jeep when it tried to
overtake the vehicle in front of it was beyond the
control of accused-appellant.
xxxx
Absent evidence of negligence, therefore,
accused-appellant cannot be held liable for
Reckless Imprudence Resulting in Damage to
Property with Physical Injuries as defined in Article
365 of the Revised Penal Code.32
From the foregoing declaration of the Court of
Appeals, it appears that petitioner Manliclic was
acquitted not on reasonable doubt, but on the
ground that he is not the author of the act
complained of which is based on Section 2(b) of
Rule 111 of the Rules of Criminal Procedure which
reads:
(b) Extinction of the penal action does not carry
with it extinction of the civil, unless the extinction
proceeds from a declaration in a final judgment
that the fact from which the civil might arise did not
exist.
In spite of said ruling, petitioner Manliclic can still
be held liable for the mishap. The afore-quoted
section applies only to a civil action arising from
crime or ex delicto and not to a civil action arising
from quasi-delict or culpa aquiliana. The extinction
of civil liability referred to in Par. (e) of Section 3,
Rule 111 [now Section 2 (b) of Rule 111], refers
exclusively to civil liability founded on Article 100
of the Revised Penal Code, whereas the civil
liability for the same act considered as a quasi-
delict only and not as a crime is not extinguished
even by a declaration in the criminal case that the
criminal act charged has not happened or has not
been committed by the accused.33
A quasi-delict or culpa aquiliana is a separate legal
institution under the Civil Code with a substantivity
all its own, and individuality that is entirely apart
and independent from a delict or crime – a
distinction exists between the civil liability arising
from a crime and the responsibility for quasi-delicts
or culpa extra-contractual. The same negligence
causing damages may produce civil liability arising
from a crime under the Penal Code, or create an
action for quasi-delicts or culpa extra-contractual
under the Civil Code.34 It is now settled that
acquittal of the accused, even if based on a finding
that he is not guilty, does not carry with it the
extinction of the civil liability based on quasi
delict.35
47
In other words, if an accused is acquitted based on
reasonable doubt on his guilt, his civil liability
arising from the crime may be proved by
preponderance of evidence only. However, if an
accused is acquitted on the basis that he was not
the author of the act or omission complained of (or
that there is declaration in a final judgment that the
fact from which the civil might arise did not exist),
said acquittal closes the door to civil liability based
on the crime or ex delicto. In this second instance,
there being no crime or delict to speak of, civil
liability based thereon or ex delicto is not possible.
In this case, a civil action, if any, may be instituted
on grounds other than the delict complained of.
As regards civil liability arising from quasi-delict or
culpa aquiliana, same will not be extinguished by
an acquittal, whether it be on ground of reasonable
doubt or that accused was not the author of the act
or omission complained of (or that there is
declaration in a final judgment that the fact from
which the civil liability might arise did not exist).
The responsibility arising from fault or negligence
in a quasi-delict is entirely separate and distinct
from the civil liability arising from negligence under
the Penal Code.36 An acquittal or conviction in the
criminal case is entirely irrelevant in the civil
case37 based on quasi-delict or culpa aquiliana.
Petitioners ask us to give credence to their version
of how the collision occurred and to disregard that
of respondent’s. Petitioners insist that while the
PRBLI bus was in the process of overtaking
respondent’s jeep, the latter, without warning,
suddenly swerved to the left (fast) lane in order to
overtake another jeep ahead of it, thus causing the
collision.
As a general rule, questions of fact may not be
raised in a petition for review. The factual findings
of the trial court, especially when affirmed by the
appellate court, are binding and conclusive on the
Supreme Court.38 Not being a trier of facts, this
Court will not allow a review thereof unless:
(1) the conclusion is a finding grounded entirely on
speculation, surmise and conjecture; (2) the
inference made is manifestly mistaken; (3) there is
grave abuse of discretion; (4) the judgment is
based on a misapprehension of facts; (5) the
findings of fact are conflicting; (6) the Court of
Appeals went beyond the issues of the case and
its findings are contrary to the admissions of both
appellant and appellees; (7) the findings of fact of
the Court of Appeals are contrary to those of the
trial court; (8) said findings of fact are conclusions
without citation of specific evidence on which they
are based; (9) the facts set forth in the petition as
well as in the petitioner's main and reply briefs are
not disputed by the respondents; and (10) the
findings of fact of the Court of Appeals are
premised on the supposed absence of evidence
and contradicted by the evidence on record.39
After going over the evidence on record, we do not
find any of the exceptions that would warrant our
departure from the general rule. We fully agree in
the finding of the trial court, as affirmed by the
Court of Appeals, that it was petitioner Manliclic
who was negligent in driving the PRBLI bus which
was the cause of the collision. In giving credence
to the version of the respondent, the trial court has
this say:
x x x Thus, which of the two versions of the manner
how the collision took place was correct, would be
determinative of who between the two drivers was
negligent in the operation of their respective
vehicle.
In this regard, it should be noted that in the
statement of Mauricio Manliclic (Exh. 15) given to
the Philippine Rabbit Investigator CV Cabading no
mention was made by him about the fact that the
driver of the jeep was overtaking another jeep
when the collision took place. The allegation that
another jeep was being overtaken by the jeep of
Calaunan was testified to by him only in Crim.
Case No. 684-M-89 before the Regional Trial
Court in Malolos, Bulacan and before this Court.
Evidently, it was a product of an afterthought on
the part of Mauricio Manliclic so that he could
explain why he should not be held responsible for
the incident. His attempt to veer away from the
truth was also apparent when it would be
considered that in his statement given to the
Philippine Rabbit Investigator CV Cabading (Exh.
15), he alleged that the Philippine Rabbit Bus
bumped the jeep of Calaunan while the Philippine
Rabbit Bus was behind the said jeep. In his
testimony before the Regional Trial Court in
Malolos, Bulacan as well as in this Court, he
alleged that the Philippine Rabbit Bus was already
on the left side of the jeep when the collision took
place. For this inconsistency between his
statement and testimony, his explanation
regarding the manner of how the collision between
the jeep and the bus took place should be taken
with caution. It might be true that in the statement
of Oscar Buan given to the Philippine Rabbit
Investigator CV Cabading, it was mentioned by the
former that the jeep of plaintiff was in the act of
overtaking another jeep when the collision
between the latter jeep and the Philippine Rabbit
Bus took place. But the fact, however, that his
statement was given on July 15, 1988, one day
after Mauricio Manliclic gave his statement should
48
not escape attention. The one-day difference
between the giving of the two statements would be
significant enough to entertain the possibility of
Oscar Buan having received legal advise before
giving his statement. Apart from that, as between
his statement and the statement of Manliclic
himself, the statement of the latter should prevail.
Besides, in his Affidavit of March 10, 1989, (Exh.
14), the unreliability of the statement of Oscar
Buan (Exh. 13) given to CV Cabading rear its "ugly
head" when he did not mention in said affidavit that
the jeep of Calaunan was trying to overtake
another jeep when the collision between the jeep
in question and the Philippine Rabbit bus took
place.
xxxx
If one would believe the testimony of the
defendant, Mauricio Manliclic, and his conductor,
Oscar Buan, that the Philippine Rabbit Bus was
already somewhat parallel to the jeep when the
collision took place, the point of collision on the
jeep should have been somewhat on the left side
thereof rather than on its rear. Furthermore, the
jeep should have fallen on the road itself rather
than having been forced off the road. Useless,
likewise to emphasize that the Philippine Rabbit
was running very fast as testified to by Ramos
which was not controverted by the defendants.40
Having ruled that it was petitioner Manliclic’s
negligence that caused the smash up, there arises
the juris tantum presumption that the employer is
negligent, rebuttable only by proof of observance
of the diligence of a good father of a
family.41 Under Article 218042 of the New Civil
Code, when an injury is caused by the negligence
of the employee, there instantly arises a
presumption of law that there was negligence on
the part of the master or employer either in the
selection of the servant or employee, or in
supervision over him after selection or both. The
liability of the employer under Article 2180 is direct
and immediate; it is not conditioned upon prior
recourse against the negligent employee and a
prior showing of the insolvency of such employee.
Therefore, it is incumbent upon the private
respondents to prove that they exercised the
diligence of a good father of a family in the
selection and supervision of their employee.43
In the case at bar, petitioner PRBLI maintains that
it had shown that it exercised the required
diligence in the selection and supervision of its
employees, particularly petitioner Manliclic. In the
matter of selection, it showed the screening
process that petitioner Manliclic underwent before
he became a regular driver. As to the exercise of
due diligence in the supervision of its employees,
it argues that presence of ready investigators
(Ganiban and Cabading) is sufficient proof that it
exercised the required due diligence in the
supervision of its employees.
In the selection of prospective employees,
employers are required to examine them as to their
qualifications, experience and service records. In
the supervision of employees, the employer must
formulate standard operating procedures, monitor
their implementation and impose disciplinary
measures for the breach thereof. To fend off
vicarious liability, employers must submit concrete
proof, including documentary evidence, that they
complied with everything that was incumbent on
them.44
In Metro Manila Transit Corporation v. Court of
Appeals,45 it was explained that:
Due diligence in the supervision of employees on
the other hand, includes the formulation of suitable
rules and regulations for the guidance of
employees and the issuance of proper instructions
intended for the protection of the public and
persons with whom the employer has relations
through his or its employees and the imposition of
necessary disciplinary measures upon employees
in case of breach or as may be warranted to
ensure the performance of acts indispensable to
the business of and beneficial to their employer.
To this, we add that actual implementation and
monitoring of consistent compliance with said
rules should be the constant concern of the
employer, acting through dependable supervisors
who should regularly report on their supervisory
functions.
In order that the defense of due diligence in the
selection and supervision of employees may be
deemed sufficient and plausible, it is not enough to
emptily invoke the existence of said company
guidelines and policies on hiring and supervision.
As the negligence of the employee gives rise to the
presumption of negligence on the part of the
employer, the latter has the burden of proving that
it has been diligent not only in the selection of
employees but also in the actual supervision of
their work. The mere allegation of the existence of
hiring procedures and supervisory policies, without
anything more, is decidedly not sufficient to
overcome such presumption.
We emphatically reiterate our holding, as a
warning to all employers, that "the formulation of
various company policies on safety without
49
showing that they were being complied with is not We now go to the award of damages. The trial
sufficient to exempt petitioner from liability arising court correctly awarded the amount of P40,838.00
from negligence of its employees. It is incumbent as actual damages representing the amount paid
upon petitioner to show that in recruiting and by respondent for the towing and repair of his
employing the erring driver the recruitment jeep.47 As regards the awards for moral and
procedures and company policies on efficiency exemplary damages, same, under the
and safety were followed." x x x. circumstances, must be modified.
The P100,000.00 awarded by the trial court as
The trial court found that petitioner PRBLI moral damages must be reduced
exercised the diligence of a good father of a family to P50,000.00.48 Exemplary damages are
in the selection but not in the supervision of its imposed by way of example or correction for the
employees. It expounded as follows: public good.49 The amount awarded by the trial
court must, likewise, be lowered
From the evidence of the defendants, it seems that to P50,000.00.50 The award of P15,000.00 for
the Philippine Rabbit Bus Lines has a very good attorney’s fees and expenses of litigation is in
procedure of recruiting its driver as well as in the order and authorized by law.51
maintenance of its vehicles. There is no evidence
though that it is as good in the supervision of its WHEREFORE, premises considered, the instant
personnel. There has been no iota of evidence petition for review is DENIED. The decision of the
introduced by it that there are rules promulgated Court of Appeals in CA-G.R. CV No. 55909 is
by the bus company regarding the safe operation AFFIRMED with the MODIFICATION that (1) the
of its vehicle and in the way its driver should award of moral damages shall be reduced
manage and operate the vehicles assigned to to P50,000.00; and (2) the award of exemplary
them. There is no showing that somebody in the damages shall be lowered to P50,000.00. Costs
bus company has been employed to oversee how against petitioners.
its driver should behave while operating their
vehicles without courting incidents similar to the SO ORDERED.
herein case. In regard to supervision, it is not
difficult to observe that the Philippine Rabbit Bus MINITA V. CHICO-NAZARIO
Lines, Inc. has been negligent as an employer and Associate Justice
it should be made responsible for the acts of its
employees, particularly the driver involved in this WE CONCUR:
case.
CONSUELO YNARES-SANTIAGO
We agree. The presence of ready investigators Associate Justice
after the occurrence of the accident is not enough Chairperson
to exempt petitioner PRBLI from liability arising
from the negligence of petitioner Manliclic. Same
does not comply with the guidelines set forth in the MA. ALICIA AUSTRIA- ROMEO J.
cases above-mentioned. The presence of the MARTINEZ CALLEJO, SR.
investigators after the accident is not enough Associate Justice Asscociate Justice
supervision. Regular supervision of employees,
that is, prior to any accident, should have been
shown and established. This, petitioner failed to ATTESTATION
do. The lack of supervision can further be seen by
the fact that there is only one set of manual I attest that the conclusions in the above Decision
containing the rules and regulations for all the were reached in consultation before the case was
drivers of PRBLI. 46 How then can all the drivers of assigned to the writer of the opinion of the Court’s
petitioner PRBLI know and be continually informed Division.
of the rules and regulations when only one manual
is being lent to all the drivers? CONSUELO YNARES-SANTIAGO
Associate Justice
For failure to adduce proof that it exercised the Chairperson, Third Division
diligence of a good father of a family in the
selection and supervision of its employees, CERTIFICATION
petitioner PRBLI is held solidarily responsible for
the damages caused by petitioner Manliclic’s Pursuant to Section 13, Article VIII of the
negligence. Constitution, and the Division Chairperson’s

50
Attestation, it is hereby certified that the
conclusions in the above Decision were reached in
consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
FIRST DIVISION
G.R. No. 135644 September 17, 2001
GOVERNMENT SERVICE INSURANCE
SYSTEM, petitioner,
vs.
SPOUSES GONZALO and MATILDE LABUNG-
DEANG, respondents.
PARDO, J.:
The petitioner in the case is the Government
Service Insurance System (hereafter, "GSIS").
Having lost the case in the trial court and the Court
of Appeals, it now comes to this Court for redress.
At the onset, we state that the issue is not
"suability" or whether GSIS may be sued despite
the doctrine of state immunity from suit, but
liability, whether or not GSIS may be liable to pay
damages to respondent spouses given the
applicable law and the circumstances of the case.1
The Case
The case is a petition2 for review on certiorari of
the decision of the Court of Appeals3 affirming the
decision of the Regional Trial Court, Angeles
City4 ordering GSIS to pay respondents Gonzalo
(now deceased)5 and Matilde Labung-Deang
(hereafter, "spouses Deang") temperate damages,
attorney's fees, legal interests and costs of suit for
the loss of their title to real property mortgaged to
the GSIS.
The Facts
Sometime in December 1969, the spouses Deang
obtained a housing loan from the GSIS in the
amount of eight thousand five hundred pesos
(P8,500.00). Under the agreement, the loan was
to mature on December 23, 1979. The loan was
secured by a real estate mortgage constituted over
the spouses' property covered by Transfer
Certificate of Title No. 14926-R issued by the
Register of Deeds of Pampanga.6 As required by
the mortgage deed, the spouses Daeng deposited
the owner's duplicate copy of the title with the
GSIS.7
On January 19, 1979, eleven (11) months before
the maturity of the loan, the spouses Deang settled
their debt with the GSIS8 and requested for the
release of the owner's duplicate copy of the title
since they intended to secure a loan from a private
lender and use the land covered by it as collateral
security for the loan of fifty thousand pesos
(P50,000.00)9 which they applied for with one
Milagros Runes.10 They would use the proceeds of
the loan applied for the renovation of the spouses'
residential house and for business.11
However, personnel of the GSIS were not able to
release the owner's duplicate of the title as it could
not be found despite diligent search.12 As stated
earlier, the spouses as mortgagors deposited the
owner's duplicate copy of the title with the GSIS
located at its office in San Fernando, Pampanga.13
Satisfied that the owner's duplicate copy of the title
was really lost, in 1979, GSIS commenced the
reconstitution proceedings with the Court of First
Instance of Pampanga for the issuance of a new
owner's copy of the same.14
On June 22, 1979, GSIS issued a certificate of
release of mortgage.15
On June 26, 1979, after the completion of judicial
proceedings, GSIS finally secured and released
the reconstituted copy of the owner's duplicate of
Transfer Certificate of Title No. 14926-R to the
spouses Deang.16
On July 6, 1979, the spouses Deang filed with the
Court of First Instance, Angeles City a complaint
against GSIS for damages, claiming that as result
of the delay in releasing the duplicate copy of the
owner's title, they were unable to secure a loan
from Milagros Runes, the proceeds of which could
have been used in defraying the estimated cost of
the renovation of their residential house and which
could have been invested in some profitable
business undertaking.17
In its defense, GSIS explained that the owners'
duplicate copy of the title was released within a
reasonable time since it had to conduct standard
pre-audit and post-audit procedures to verify if the
spouses Deang's account had been fully settled.18
51
On July 31, 1995, the trial court rendered a
decision ruling for the spouses Deang. The trial
court reasoned that the loss of the owner's
duplicate copy of the title "in the possession of
GSIS as security for the mortgage... without
justifiable cause constitutes negligence on the part
of the employee of GSIS who lost it," making GSIS
liable for damages.19 We quote the dispositive
portion of the decision:20
"IN VIEW OF THE FOREGOING, the
Court renders judgment ordering the
GSIS:
"a) To pay the plaintiffs-spouses the
amount of P20,000.00 as temperate
damages;
"b) To pay plaintiffs-spouses the amount of
P15,000.00 as attorney's fees;
"c) To pay legal interest on the award in
paragraphs a) and b) from the filing of the
complaint; and,
"d) To pay cost of the suit.
"SO ORDERED."
On August 30, 1995, GSIS appealed the decision
to the Court of Appeals.21
On September 21, 1998, the Court of Appeals
promulgated a decision affirming the appealed
judgment, ruling: First, since government owned
and controlled corporations (hereafter, "GOCCs")
whose charters provide that they can sue and be
sued have a legal personality separate and distinct
from the government, GSIS is not covered by
Article 218022 of the Civil Code, and it is liable for
damages caused by their employees acting within
the scope of their assigned tasks. Second, the
GSIS is liable to pay a reasonable amount of
damages and attorney's fees, which the appellate
court will not disturb. We quote the dispositive
portion:23
"WHEREFORE, finding no reversible error
in the appealed judgment, the same is
hereby AFFIRMED.
"SO ORDERED."
Hence, this appeal.24
The Issue
Whether the GSIS, as a GOCC primarily
performing governmental functions, is liable for a
negligent act of its employee acting within the
scope of his assigned tasks.25
The Court's Ruling
We rule that the GSIS is liable for damages. We
deny the petition for lack of merit.
GSIS, citing the sixth paragraph of Article 2180 of
the Civil Code argues that as a GOCC, it falls
within the term "State" and cannot be held
vicariously liable for negligence committed by its
employee acting within his functions.26
"Article 2180. The obligation imposed by
Article 2176 is demandable not only for
one's own acts or omissions, but also for
those of persons for whom one is
responsible.
xxx
"Employers shall be liable for the damages
caused by their employees and household
helpers acting within the scope of their
assigned tasks, even though the former
are not engaged in any business of
industry.
"The State is responsible in like
manner when it acts though a special
agent, but not when the damage has been
caused by the official to whom the task
was done properly pertains, in which case
what is provided in Article 2176 shall be
applicable.
xxx (italics ours)"
The argument is untenable. The cited provision of
the Civil Code is not applicable to the case at bar.
However, the trial court and the Court of Appeals
erred in citing it as the applicable law.
Nonetheless, the conclusion is the same. As
heretofore stated, we find that GSIS is liable for
damages.
The trial court and the Court of Appeals treated the
obligation of GSIS as one springing from quasi-
delict.27 We do not agree. Article 2176 of the Civil
Code defines quasi-delict as follows:
"Whoever by act or omission causes
damages to another, there being fault or
negligence, is obliged to pay for the
52
 damage done. Such fault or negligence, if
there is no pre-existing contractual relation
between the parties, is called a quasi-
delict and is governed by the provisions of
this Chapter (italics ours)."
Under the facts, there was a pre-existing contract
between the parties. GSIS and the spouses Deang
had a loan agreement secured by a real estate
mortgage. The duty to return the owner's duplicate
copy of title arose as soon as the mortgage was
released.28 GSIS insists that it was under no
obligation to return the owner's duplicate copy of
the title immediately. This insistence is not
warranted. Negligence is obvious as the owners'
duplicate copy could not be returned to the
owners. Thus, the more applicable provisions of
the Civil Code are:
"Article 1170. Those who in the
performance of their obligations are guilty
of fraud, negligence, or delay and those
who in any manner contravene the tenor
thereof are liable for damages."
"Article 2201. In contracts and quasi-
contracts, the damages for which the
obligor who acted in good faith is liable
shall be those that are the natural and
probable consequences of the breach of
the obligation, and which the parties have
foreseen or could have reasonably
foreseen at the time the obligation was
constituted x x x."
Since good faith is presumed and bad faith is a
matter of fact which should be proved,29 we shall
treat GSIS as a party who defaulted in its
obligation to return the owners' duplicate copy of
the title. As an obligor in good faith, GSIS is liable
for all the "natural and probable consequences of
the breach of the obligation." The inability of the
spouses Deang to secure another loan and the
damages they suffered thereby has its roots in the
failure of the GSIS to return the owners' duplicate
copy of the title.
We come now to the amount of damages. In a
breach of contract, moral damages are not
awarded if the defendant is not shown to have
acted fraudulently or with malice or bad faith.30 The
fact that the complainant suffered economic
hardship31 or worries and mental anxiety32 is not
enough.
There is likewise no factual basis for an award of
actual damages. Actual damages to be
compensable must be proven by clear
evidence.33 A court can not rely on "speculation,
conjecture or guess work" as to the fact and
amount of damages, but must depend on actual
proof.34
However, it is also apparent that the spouses
Deang suffered financial damage because of the
loss of the owners' duplicate copy of the title.
Temperate damages may be granted.
"Article 2224. Temperate or moderate
damages, which are more than nominal
but less than compensatory damages,
may be recovered when the court finds
that some pecuniary loss has been
suffered but its amount cannot, from the
nature of the case, be proved with
certainty."
GSIS submits that there must be proof of
pecuniary loss. This is untenable. The rationale
behind temperate damages is precisely that from
the nature of the case, definite proof of pecuniary
loss cannot be offered. When the court is
convinced that there has been such loss, the judge
is empowered to calculate moderate damages,
rather than let the complainant suffer without
redress from the defendant's wrongful act.35
The award of twenty thousand pesos (P20,000.00)
in temperate damages is reasonable considering
that GSIS spent for the reconstitution of the
owners' duplicate copy of the title.
Next, the attorney's fees. Attorney's fees which are
granted as an item of damages are generally not
recoverable.36The award of attorney's fees is the
exception rather than the rule and counsel's fees
are not to be awarded every time a party wins a
suit. The award of attorney's fees demands
factual, legal and equitable justification; its basis
cannot be left to speculation or conjecture.37
We find no circumstance to justify the award of
attorney's fees. We delete the same.
The Fallo
WHEREFORE, we DENY the petition.
We AFFIRM the decision of the Court of Appeals
in CA-G.R. CV No. 51240 with
the MODIFICATION that award of attorney's fees
is DELETED.
No costs.
SO ORDERED.
53
Davide, Jr., C.J., Kapunan, and Ynares-Santiago,
JJ., concur.
Puno, J., on official leave.
EN BANC
[G.R. No. 70890. September 18, 1992.]
CRESENCIO LIBI * and AMELIA YAP
LIBI, Petitioners, v. HON. INTERMEDIATE
APPELLATE COURT, FELIPE GOTIONG and
SHIRLEY GOTIONG, Respondents.
Alex Y. Tan, for Petitioners.
Mario D. Ortiz and Danilo V. Ortiz for Private
Respondents.
SYLLABUS
1. CIVIL LAW; QUASI DELICT; LIABILITY OF
PARENTS FOR CIVIL LIABILITY ARISING FROM
CRIMINAL OFFENSES COMMITTED BY THEIR
MINOR CHILDREN; RULE. — The parents are
and should be held primarily liable for the civil
liability arising from criminal offenses committed
by their minor children under their legal authority
or control, or who live in their company, unless it is
proven that the former acted with the diligence of
a good father of a family to prevent such damages.
That primary liability is premised on the provisions
of Article 101 of the Revised Penal Code with
respect to damages ex delicto caused by their
children 9 years of age or under, or over 9 but
under 15 years of age who acted without
discernment; and, with regard to their children over
9 but under 15 years of age who acted with
discernment, or 15 years or over but under 21
years of age, such primary liability shall be
imposed pursuant to Article 2180 of the Civil Code.
Under said Article 2180, the enforcement of such
liability shall be effected against the father and, in
case of his death or incapacity, the mother. This
was amplified by the Child and Youth Welfare
Code which provides that the same shall devolve
upon the father and, in case of his death or
incapacity, upon the mother or, in case of her
death or incapacity, upon the guardian, but the
liability may also be voluntarily assumed by a
relative or family friend of the youthful offender.
However, under the Family Code, this civil liability
is now, without such alternative qualification, the
responsibility of the parents and those who
exercise parental authority over the minor
offender. For civil liability arising from quasi-delicts
committed by minors, the same rules shall apply in
accordance with Articles 2180 and 2182 of the
Civil Code, as so modified.
DECISION
REGALADO, J.:
One of the ironic verities of life, it has been said, is
that sorrow is sometimes a touchstone of love. A
tragic illustration is provided by the instant case,
wherein two lovers died while still in the prime of
their years, a bitter episode for those whose lives
they have touched. While we cannot expect to
award complete assuagement to their families
through seemingly prosaic legal verbiage, this
disposition should at least terminate the acrimony
and rancor of an extended judicial contest
resulting from the unfortunate occurrence.
In this final denouement of the judicial recourse the
stages whereof were alternately initiated by the
parties, petitioners are now before us seeking the
reversal of the judgment of respondent court
promulgated on January 2, 1985 in AC-G.R. CV
No. 69060 with the following decretal portion:
"WHEREFORE, the decision of the lower court
dismissing plaintiff’s complaint is hereby reversed;
and instead, judgment is hereby rendered
sentencing defendants, jointly and solidarily, to
pay to plaintiffs the following amounts:
1. Moral damages, P30,000.000;
2. Exemplary damages, P10,000.00;
3. Attorney’s fees, P20,000.00, and costs.
However, denial of defendants-appellees’
counterclaims is affirmed." 1
Synthesized from the findings of the lower courts,
it appears that respondent spouses are the
legitimate parents of Julie Ann Gotiong who, at the
time of the deplorable incident which took place
and from which she died on January 14, 1979, was
an 18-year old first year commerce student of the
University of San Carlos, Cebu City; while
petitioners are the parents of Wendell Libi, then a
minor between 18 and 19 years of age living with
his aforesaid parents, and who also died in the
same event on the same date.
For more than two (2) years before their deaths,
54
Julie Ann Gotiong and Wendell Libi were
sweethearts until December, 1978 when Julie Ann
broke up her relationship with Wendell after she
supposedly found him to be sadistic and
irresponsible. During the first and second weeks of
January, 1979, Wendell kept pestering Julie Ann
with demands for reconciliation but the latter
persisted in her refusal, prompting the former to
resort to threats against her. In order to avoid him,
Julie Ann stayed in the house of her best friend,
Malou Alfonso, at the corner of Maria Cristina and
Juana Osmeña Streets, Cebu City, from January
7 to 13, 1978.
On January 14, 1979, Julie Ann and Wendell died,
each from a single gunshot wound inflicted with the
same firearm, a Smith and Wesson revolver
licensed in the name of petitioner Cresencio Libi,
which was recovered from the scene of the crime
inside the residence of private respondents at the
corner of General Maxilom and D. Jakosalem
streets of the same city.
Due to the absence of an eyewitness account of
the circumstances surrounding the death of both
minors, their parents, who are the contending
parties herein, posited their respective theories
drawn from their interpretation of circumstantial
evidence, available reports, documents and
evidence of physical facts.
Private respondents, bereaved over the death of
their daughter, submitted that Wendell caused her
death by shooting her with the aforesaid firearm
and, thereafter, turning the gun on himself to
commit suicide. On the other hand, Petitioners,
puzzled and likewise distressed over the death of
their son, rejected the imputation and contended
that an unknown third party, whom Wendell may
have displeased or antagonized by reason of his
work as a narcotics informer of the Constabulary
Anti-Narcotics Unit (CANU), must have caused
Wendell’s death and then shot Julie Ann to
eliminate any witness and thereby avoid
identification.
As a result of the tragedy, the parents of Julie Ann
filed Civil Case No. R-17774 in the then Court of
First Instance of Cebu against the parents of
Wendell to recover damages arising from the
latter’s vicarious liability under Article 2180 of the
Civil Code. After trial, the court below rendered
judgment on October 20, 1980 as follows:
"WHEREFORE, premises duly considered,
judgment is hereby rendered dismissing plaintiffs’
complaint for insufficiency of the evidence.
Defendants’ counterclaim is likewise denied for
lack of sufficient merit." 2
On appeal to respondent court, said judgment of
the lower court dismissing the complaint of therein
plaintiffs-appellants was set aside and another
judgment was rendered against defendants-
appellees who, as petitioners in the present appeal
by certiorari, now submit for resolution the
following issues in this case:
1. Whether or not respondent court correctly
reversed the trial court in accordance with
established decisional laws; and
2. Whether or not Article 2180 of the Civil Code
was correctly interpreted by respondent court to
make petitioners liable for vicarious liability. 3
In the proceedings before the trial court, Dr. Jesus
P. Cerna, Police Medico-Legal Officer of Cebu,
submitted his findings and opinions on some
postulates for determining whether or not the
gunshot wound was inflicted on Wendell Libi by his
own suicidal act. However, undue emphasis was
placed by the lower court on the absence of
gunpowder or tattooing around the wound at the
point of entry of the bullet. It should be
emphasized, however, that this is not the only
circumstance to be taken into account in the
determination of whether it was suicide or not.
It is true that said witness declared that he found
no evidence of contact or close-contact of an
explosive discharge in the entrance wound.
However, as pointed out by private respondents,
the body of deceased Wendell Libi must have
been washed at the funeral parlor, considering the
hasty interment thereof a little after eight (8) hours
from the occurrence wherein he died. Dr. Cerna
himself could not categorically state that the body
of Wendell Libi was left untouched at the funeral
parlor before he was able to conduct his autopsy.
It will also be noted that Dr. Cerna was negligent
in not conducting a paraffin test on Wendell Libi,
hence possible evidence of gunpowder residue on
Wendell’s hands was forever lost when Wendell
was hastily buried.
More specifically, Dr. Cerna testified that he
conducted an autopsy on the body of Wendell Libi
about eight (8) hours after the incident or, to be
exact, eight (8) hours and twenty (20) minutes
based on the record of death; that when he arrived
at the Cosmopolitan Funeral Homes, the body of
the deceased was already on the autopsy table
and in the stage of rigor mortis; and that said body
was not washed, but it was dried. 4 However, on
redirect examination, he admitted that during the
8-hour interval, he never saw the body nor did he
see whether said body was wiped or washed in the
area of the wound on the head which he examined
55
because the deceased was inside the morgue. 5
In fact, on cross-examination, he had earlier
admitted that as far as the entrance of the wound,
the trajectory of the bullet and the exit of the wound
are concerned, it is possible that Wendell Libi shot
himself.
He further testified that the muzzle of the gun was
not pressed on the head of the victim and that he
found no burning or singeing of the hair or
extensive laceration on the gunshot wound of
entrance which are general characteristics of
contact or near-contact fire. On direct examination,
Dr. Cerna nonetheless made these clarification:
"Q Is it not a fact that there are certain guns which
are so made that there would be no black residue
or tattooing that could result from these guns
because they are what we call clean?
A Yes, sir. I know that there are what we call
smokeless powder.
ATTY. ORTIZ:
Q Yes. So, in cases, therefore, of guns where the
powder is smokeless, those indications that you
said may not rule out the possibility that the gun
was closer than 24 inches, is that correct?
A If the . . . assuming that the gun used was .. the
bullet used was a smokeless powder.
Q At any rate, doctor, from . . . disregarding those
other matters that you have noticed, the singeing,
etc., from the trajectory, based on the trajectory of
the bullet as shown in your own sketch, is it not a
fact that the gun could have been fired by the
person himself, the victim himself, Wendell Libi,
because it shows a point of entry a little above the
right ear and point of exit a little above that, to be
very fair and on your oath?
A As far as the point of entrance is concerned and
as far as the trajectory of the bullet is concerned
and as far as the angle or the manner of fire is
concerned, it could have been fired by the victim."
As shown by the evidence, there were only two
used bullets 8 found at the scene of the crime,
each of which were the bullets that hit Julie Ann
Gotiong and Wendell Libi, respectively. Also, the
sketch prepared by the Medico-Legal Division of
the National Bureau of Investigation, 9 shows that
there is only one gunshot wound of entrance
located at the right temple of Wendell Libi. The
necropsy report prepared by Dr. Cerna states:
x x x
"Gunshot wound, ENTRANCE, ovaloid, 0.5 x 0.4
cm., with contusion collar widest inferiorly by 0.2
cm., edges inverted, oriented upward, located at
the head, temporal region, right, 2.8 cms. behind
and 5.5 cms. above right external auditory meatus,
directed slightly forward, upward and to the left,
involving skin and soft tissues, making a punch-in
fracture on the temporal bone, right, penetrating
cranial cavity, lacerating extensively along its
course the brain tissues, fracturing parietal bone,
left, and finally making an EXIT wound, irregular,
2.0 x 1.8 cms., edges (e)verted, parietal region,
left, 2.0 cms. behind and 12.9 cms. above left
external auditory meatus.
x x x
"Evidence of contact or close-contact fire, such as
burning around the gunshot wound of entrance,
gunpowder tatooing (sic), smudging, singeing of
hair, extensive laceration or bursting of the
gunshot wound of entrance, or separation of the
skin from the underlying tissue, are absent." 10
On cross-examination, Dr. Cerna demonstrated
his theory which was made of record, thus:
"Q Now, will you please use yourself as Wendell
Libi, and following the entrance of the wound, the
trajectory of the bullet and the exit of the wound,
and measuring yourself 24 inches, will you please
indicate to the Honorable Court how would it have
been possible for Wendell Libi to kill himself? Will
you please indicate the 24 inches?
WITNESS:
A Actually, sir, the 24 inches is approximately one
arm’s length.
ATTY. SENINING:
I would like to make of record that the witness has
demonstrated by extending his right arm almost
straight towards his head." 11
Private respondents assail the fact that the trial
court gave credence to the testimonies of
defendants’ witnesses Lydia Ang and James
Enrique Tan, the first being a resident of an
apartment across the street from the Gotiongs and
the second, a resident of the house adjacent to the
Gotiong residence, who declared having seen a
"shadow" of a person at the gate of the Gotiong
house after hearing shots therefrom.
56
On cross-examination, Lydia Ang testified that the
apartment where she was staying faces the gas
station; that it is the second apartment; that from
her window she can see directly the gate of the
Gotiongs and, that there is a firewall between her
apartment and the gas station. 12 After seeing a
man jump from the gate of the Gotiongs to the
rooftop of the Tans, she called the police station
but the telephone lines were busy. Later on, she
talked with James Enrique Tan and told him that
she saw a man leap from the gate towards his
rooftop.
However, James Enrique Tan testified that he saw
a "shadow" on top of the gate of the Gotiongs, but
denied having talked with anyone regarding what
he saw. He explained that he lives in a duplex
house with a garden in front of it; that his house is
next to Felipe Gotiong’s house; and he further
gave the following answers to these questions:
"ATTY. ORTIZ: (TO WITNESS).
Q What is the height of the wall of the Gotiong’s in
relation to your house?
WITNESS:
A It is about 8 feet.
ATTY. ORTIZ: (TO WITNESS)
Q And where were you looking from?
WITNESS:
A From upstairs in my living room.
ATTY. ORTIZ (TO WITNESS)
Q From Your living room window, is that correct?
WITNESS:
A Yes, but not very clear because the wall is high."
14
Analyzing the foregoing testimonies, we agree
with respondent court that the same do not inspire
credence as to the reliability and accuracy of the
witnesses’ observations, since the visual
perceptions of both were obstructed by high walls
in their respective houses in relation to the house
of herein private respondents. On the other hand,
witness Manolo Alfonso, testifying on rebuttal,
attested without contradiction that he and his
sister, Malou Alfonso, were waiting for Julie Ann
Gotiong when they heard her scream; that when
Manolo climbed the fence to see what was going
on inside the Gotiong house, he heard the first
shot; and, not more than five (5) seconds later, he
heard another shot. Consequently, he went down
from the fence and drove to the police station to
report the incident. 15 Manolo’s direct and candid
testimony establishes and explains the fact that it
was he whom Lydia Ang and James Enrique Tan
saw as the "shadow" of a man at the gate of the
Gotiong house.
We have perforce to reject petitioners’ effete and
unsubstantiated pretension that it was another
man who shot Wendell and Julie Ann. It is
significant that the Libi family did not even point to
or present any suspect in the crime nor did they file
any case against any alleged "John Doe." Nor can
we sustain the trial court’s dubious theory that
Wendell Libi did not die by his own hand because
of the overwhelming evidence — testimonial,
documentary and pictorial — the confluence of
which point to Wendell as the assailant of Julie
Ann, his motive being revenge for her rejection of
his persistent pleas for a reconciliation.
Petitioners’ defense that they had exercised the
due diligence of a good father of a family, hence
they should not be civilly liable for the crime
committed by their minor son, is not borne out by
the evidence on record either.
Petitioner Amelita Yap Libi, mother of Wendell,
testified that her husband, Cresencio Libi, owns a
gun which he kept in a safety deposit box inside a
drawer in their bedroom. Each of these petitioners
holds a key to the safety deposit box and Amelita’s
key is always in her bag, all of which facts were
known to Wendell. They have never seen their son
Wendell taking or using the gun. She admitted,
however, that on that fateful night the gun was no
longer in the safety deposit box. 16 We,
accordingly, cannot but entertain serious doubts
that petitioner spouses had really been exercising
the diligence of a good father of a family by safely
locking the fatal gun away. Wendell could not have
gotten hold thereof unless one of the keys to the
safety deposit box was negligently left lying around
or he had free access to the bag of his mother
where the other key was.
The diligence of a good father of a family required
by law in a parent and child relationship consists,
to a large extent, of the instruction and supervision
of the child. Petitioners were gravely remiss in their
duties as parents in not diligently supervising the
activities of their son, despite his minority and
immaturity, so much so that it was only at the time
of Wendell’s death that they allegedly discovered
that he was a CANU agent and that Cresencio’s
gun was missing from the safety deposit box. Both
57
parents were sadly wanting in their duty and
responsibility in monitoring and knowing the
activities of their children who, for all they know,
may be engaged in dangerous work such as being
drug informers, 17 or even drug users. Neither was
a plausible explanation given for the photograph of
Wendell, with a handwritten dedication to Julie
Ann at the back thereof, 18 holding upright what
clearly appears as a revolver and on how or why
he was in possession of that firearm.
In setting aside the judgment of the court a quo
and holding petitioners civilly liable, as explained
at the start of this opinion, respondent court waved
aside the protestations of diligence on the part of
petitioners and had this to say:
". . . It is still the duty of parents to know the activity
of their children who may be engaged in this
dangerous activity involving the menace of drugs.
Had the defendants-appellees been diligent in
supervising the activities of their son, Wendell, and
in keeping said gun from his reach, they could
have prevented Wendell from killing Julie Ann
Gotiong. Therefore, appellants are liable under
Article 2180 of the Civil Code which provides:
‘The father, and in case of his death or incapacity,
the mother, are responsible for the damages
caused by their minor children who live in their
company.’
"Having been grossly negligent in preventing
Wendell Libi from having access to said gun which
was allegedly kept in a safety deposit box,
defendants-appellees are subsidiarily liable for the
natural consequence of the criminal act of said
minor who was living in their company. This
vicarious liability of herein defendants-appellees
has been reiterated by the Supreme Court in many
cases, prominent of which is the case of Fuellas v.
Cadano, et. al. (L-14409, Oct. 31, 1961, 3 SCRA
361-367), which held that:
‘The subsidiary liability of parents for damages
caused by their minor children imposed by Article
2180 of the New Civil Code covers obligations
arising from both quasi-delicts and criminal
offenses.’
‘The subsidiary liability of parent’s arising from the
criminal acts of their minor children who acted with
discernment is determined under the provisions of
Article 2180, N.C.C. and under Article 101 of the
Revised Penal Code, because to hold that the
former only covers obligations which arise from
quasi-delicts and not obligations which arise from
criminal offenses, would result in the absurdity that
while for an act where mere negligence intervenes
the father or mother may stand subsidiarily liable
for the damages caused by his or her son, no
liability would attach if the damage is caused with
criminal intent.’ (3 SCRA 361-362).
". . . In the instant case, minor son of herein
defendants-appellees, Wendell Libi somehow got
hold of the key to the drawer where said gun was
kept under lock without defendant-spouses ever
knowing that said gun had been missing from that
safety box since 1978 when Wendell Libi had) a
picture taken wherein he proudly displayed said
gun and dedicated this picture to his sweetheart,
Julie Ann Gotiong; also since then, Wendell Libi
was said to have kept said gun in his car, in
keeping up with his supposed role of a CANU
agent . . ."
x x x
"Based on the foregoing discussions of the
assigned errors, this Court holds that the lower
court was not correct in dismissing herein
plaintiffs-appellants’ complaint because as
preponderantly shown by evidence, defendants-
appellees utterly failed to exercise all the diligence
of a good father of the family in preventing their
minor son from committing this crime by means of
the gun of defendants-appellees which was freely
accessible to Wendell Libi for they have not
regularly checked whether said gun was still under
lock, but learned that it was missing from the safety
deposit box only after the crime had been
committed." (Emphases ours.) 19
We agree with the conclusion of respondent court
that petitioners should be held liable for the civil
liability based on what appears from all indications
was a crime committed by their minor son. We take
this opportunity, however, to digress and discuss
its ratiocination therefor on jurisprudential dicta
which we feel require clarification.
In imposing sanctions for the so-called vicarious
liability of petitioners, respondent court cites
Fuellas v. Cadano, Et. Al. 20 which supposedly
holds that" (t)he subsidiary liability of parents for
damages caused by their minor children imposed
by Article 2180 of the New Civil Code covers
obligations arising from both quasi-delicts and
criminal offenses," followed by an extended
quotation ostensibly from the same case
explaining why under Article 2180 of the Civil Code
and Article 101 of the Revised Penal Code parents
should assume subsidiary liability for damages
caused by their minor children. The quoted
passages are set out two paragraphs back, with
pertinent underscoring for purposes of the
discussion hereunder.
58
Now, we do not have any objection to the doctrinal
rule holding, the parents liable, but the
categorization of their liability as being subsidiary,
and not primary, in nature requires a hard second
look considering previous decisions of this court
on the matter which warrant comparative
analyses. Our concern stems from our readings
that if the liability of the parents for crimes or quasi-
delicts of their minor children is subsidiary, then
the parents can neither invoke nor be absolved of
civil liability on the defense that they acted with the
diligence of a good father of a family to prevent
damages. On the other hand, if such liability
imputed to the parents is considered direct and
primary, that diligence would constitute a valid and
substantial defense.
We believe that the civil liability of parents for
quasi-delicts of their minor children, as
contemplated in Article 2180 of the Civil Code, is
primary and not subsidiary. In fact, if we apply
Article 2194 of said code which provides for
solidary liability of joint tortfeasors, the persons
responsible for the act or omission, in this case the
minor and the father and, in case of his death of
incapacity, the mother, are solidarily liable.
Accordingly, such parental liability is primary and
not subsidiary, hence the last paragraph of Article
2180 provides that" (t)he responsibility treated of
in this article shall cease when the persons herein
mentioned prove that they observed all the
diligence of a good father of a family to prevent
damages."
We are also persuaded that the liability of the
parents for felonies committed by their minor
children is likewise primary, not subsidiary. Article
101 of the Revised Penal Code provides:
"ARTICLE 101. Rules regarding civil liability in
certain cases. —
x x x Penal Code. In both instances, this Court held that
First. In cases of subdivisions . . . 2, and 3 of Article
12, the civil liability for acts committed by . . . a
person under nine years of age, or by one over
nine but under fifteen years of age, who has acted
without discernment, shall devolve upon those
having such person under their legal authority or
control, unless it appears that there was no fault or
negligence on their part." (Emphasis supplied.) 21
Accordingly, just like the rule in Article 2180 of the
Civil Code, under the foregoing provision the civil
liability of the parents for crimes committed by their
minor children is likewise direct and primary, and
also subject to the defense of lack of fault or
negligence on their part, that is, the exercise of the
diligence of a good father of a family.
That in both quasi-delicts and crimes the parents
primarily respond for such damages is buttressed
by the corresponding provisions in both codes that
the minor transgressor shall be answerable or
shall respond with his own property only in the
absence or in case of insolvency of the former.
Thus, for civil liability ex quasi delicto of minors,
Article 2182 of the Civil Code states that" (i)f the
minor causing damage has no parents or
guardian, the minor . . . shall be answerable with
his own property in an action against him where a
guardian ad litem shall be appointed." For civil
liability ex delicto of minors, an equivalent
provision is found in the third paragraph of Article
101 of the Revised Penal Code, to wit:
"Should there be no person having such . . . minor
under his authority, legal guardianship or control,
or if such person be insolvent, said . . . minor shall
respond with (his) own property, excepting
property exempt from execution, in accordance
with civil law."
The civil liability of parents for felonies committed
by their minor children contemplated in the
aforesaid rule in Article 101 of the Revised Penal
Code in relation to Article 2180 of the Civil Code
has, aside from the aforecited case of Fuellas,
been the subject of a number of cases adjudicated
by this Court, viz.: Exconde v. Capuno, Et Al., 22
Araneta v. Arreglado, 23 Salen, Et. Al. v. Balce, 24
Paleyan, etc., Et. Al. v. Bangkili, Et Al., 25 and
Elcano, et al, v. Hill, Et. Al. 26 Parenthetically, the
aforesaid cases were basically on the issue of the
civil liability of parents for crimes committed by
their minor children over 9 but under 15 years of
age, who acted with discernment, and also of
minors 15 years of aye or over, since these
situations are not covered by Article 101, Revised
the issue of parental civil liability should be
resolved in accordance with the provisions of
Article 2180 of the Civil Code for the reasons well
expressed in Salen and adopted in the cases
hereinbefore enumerated that to hold that the civil
liability under Article 2180 would apply only to
quasi-delicts and not to criminal offenses would
result in the absurdity that in an act involving mere
negligence the parents would be liable but not
where the damage is caused with criminal intent.
In said cases, however, there are unfortunate
variances resulting in a regrettable inconsistency
in the Court’s determination of whether the liability
of the parents, in cases involving either crimes or
quasi-delicts of their minor children, is primary or
subsidiary.
59

In Exconde, where the 15-year old minor was
convicted of double homicide through reckless
imprudence, in a separate civil action arising from
the crime the minor and his father were held jointly
and severally liable for failure of the latter to prove
the diligence of a good father of a family. The same
liability in solidum and, therefore, primary liability
was imposed in a separate civil action in Araneta
on the parents and their 14-year old son who was
found guilty of frustrated homicide, but on the
authority of Article 2194 of the Civil Code providing
for solidary responsibility of two or more persons
who are liable for a quasi-delict.
However, in Salen, the father was declared
subsidiarily liable for damages arising from the
conviction of his son, who was over 15 but less
than 18 years of age, by applying Article 2180 but,
this time, disregarding Article 2194 of the Civil
Code. In the present case, as already explained,
the petitioners herein were also held liable but
supposedly in line with Fuellas which purportedly
declared the parents subsidiarily liable for the civil
liability for serious physical injuries committed by
their 13-year old son. On the other hand, in
Paleyan, the mother and her 19-year old son were
adjudged solidarily liable for damages arising from
his conviction for homicide by the application of
Article 2180 of the Civil Code since this is likewise
not covered by Article 101 of the Revised Penal
Code. Finally, in Elcano, although the son was
acquitted in a homicide charge due to "lack of
intent, coupled with mistake," it was ruled that
while under Article 2180 of the Civil Code there
should be solidary liability for damages, since the
son, "although married, was living with his father
and getting subsistence from him at the time of the
occurrence," but "is now of age, as a matter of
equity" the father was only held subsidiarily liable.
It bears stressing, however, that the Revised
Penal Code provides for subsidiary liability only for
persons causing damages under the compulsion
of irresistible force or under the impulse of an
uncontrollable fear; 27 innkeepers, tavernkeepers
and proprietors of establishments; 28 employers,
teachers, persons and corporations engaged in
industry; 29 and principals, accomplices and
accessories for the unpaid civil liability of their co-
accused in the other classes. 30
Also, coming back to respondent court’s reliance
on Fuellas in its decision in the present case, it is
not exactly accurate to say that Fuellas provided
for subsidiary liability of the parents therein. A
careful scrutiny shows that what respondent court
quoted verbatim in its decision now on appeal in
the present case, and which it attributed to Fuellas,
was the syllabus on the law report of said case
which spoke of "subsidiary" liability. However,
such categorization does not specifically appear in
the text of the decision in Fuellas. In fact, after
reviewing therein the cases of Exconde, Araneta
and Salen and the discussions in said cases of
Article 101 of the Revised Penal Code in relation
to Article 2180 of the Civil Code, this Court
concluded its decision in this wise:
"Moreover, the case at bar was decided by the
Court of Appeals on the basis of evidence
submitted therein by both parties, independent of
the criminal case. And responsibility for fault or
negligence under Article 2176 upon which the
present action was instituted, is entirely separate
and distinct from the civil liability arising from fault
or negligence under the Penal Code (Art. 2177),
and having in mind the reasons behind the law as
heretofore stated, any discussion as to the minor’s
criminal responsibility is of no moment." 1aw
library
Under the foregoing considerations, therefore, we
hereby rule that the parents are and should be held
primarily liable for the civil liability arising from
criminal offenses committed by their minor
children under their legal authority or control, or
who live in their company, unless it is proven that
the former acted with the diligence of a good father
of a family to prevent such damages. That primary
liability is premised on the provisions of Article 101
of the Revised Penal Code with respect to
damages ex delicto caused by their children 9
years of age or under, or over 9 but under 15 years
of age who acted without discernment; and, with
regard to their children over 9 but under 15 years
of age who acted with discernment, or 15 years or
over but under 21 years of age, such primary
liability shall be imposed pursuant to Article 2180
of the Civil Code. 31
Under said Article 2180, the enforcement of such
liability shall be effected against the father and, in
case of his death or incapacity, the mother. This
was amplified by the Child and Youth Welfare
Code which provides that the same shall devolve
upon the father and, in case of his death or
incapacity, upon the mother or, in case of her
death or incapacity, upon the guardian, but the
liability may also be voluntarily assumed by a
relative or family friend of the youthful offender. 32
However, under the Family Code, this civil liability
is now, without such alternative qualification, the
responsibility of the parents and those who
exercise parental authority over the minor
offender. 33 For civil liability arising from quasi-
delicts committed by minors, the same rules shall
60
apply in accordance with Articles 2180 and 2182
of the Civil Code, as so modified.
In the case at bar, whether the death of the
hapless Julie Ann Gotiong was caused by a felony
or a quasi-delict committed by Wendell Libi,
respondent court did not err in holding petitioners
liable for damages arising therefrom. Subject to
the preceding modifications of the premises relied
upon by it therefor and on the bases of the legal
imperatives herein explained, we conjoin in its
findings that said petitioners failed to duly exercise
the requisite diligentissimi patris familias to
prevent such damages.
ACCORDINGLY, the instant Petition is DENIED
and the assailed judgment of respondent Court of
Appeals is hereby AFFIRMED, with costs against
petitioners.
SO ORDERED.
Narvasa, C.J., Gutierrez, Jr., Cruz, Padilla, Bidin,
Griño-Aquino, Medialdea, Romero, Nocon and
Bellosillo, Jr., JJ., concur.
Feliciano, J., is on leave.
Davide, Jr., J., took no part. I used to be counsel
of one of the parties.
Melo and Campos, Jr., JJ., took no part.
THIRD DIVISION
G.R. No. 144274 September 20, 2004
NOSTRADAMUS VILLANUEVA, petitioner,
vs.
PRISCILLA R. DOMINGO and LEANDRO LUIS
R. DOMINGO, respondents.
DECISION
CORONA, J.:
This is a petition to review the decision1 of the
Court of Appeals in CA-G.R. CV No. 52203
affirming in turn the decision of the trial court
finding petitioner liable to respondent for damages.
The dispositive portion read:
WHEREFORE, the appealed decision is
hereby AFFIRMED except the award of
attorney’s fees including appearance fees
which is DELETED.
SO ORDERED.2
The facts of the case, as summarized by the Court
of Appeals, are as follows:
[Respondent] Priscilla R. Domingo is the
registered owner of a silver Mitsubishi
Lancer Car model 1980 bearing plate No.
NDW 781 ’91 with [co-respondent]
Leandro Luis R. Domingo as authorized
driver. [Petitioner] Nostradamus
Villanueva was then the registered
"owner" of a green Mitsubishi Lancer
bearing Plate No. PHK 201 ’91.
On 22 October 1991 at about 9:45 in the
evening, following a green traffic light,
[respondent] Priscilla Domingo’s silver
Lancer car with Plate No. NDW 781 ’91
then driven by [co-respondent] Leandro
Luis R. Domingo was cruising along the
middle lane of South Superhighway at
moderate speed from north to south.
Suddenly, a green Mitsubishi Lancer with
plate No. PHK 201 ’91 driven by Renato
Dela Cruz Ocfemia darted from Vito Cruz
Street towards the South Superhighway
directly into the path of NDW 781 ’91
thereby hitting and bumping its left front
portion. As a result of the impact, NDW
781 ’91 hit two (2) parked vehicles at the
roadside, the second hitting another
parked car in front of it.
Per Traffic Accident Report prepared by
Traffic Investigator Pfc. Patrocinio N.
Acido, Renato dela Cruz Ocfemia was
driving with expired license and positive for
alcoholic breath. Hence, Manila Assistant
City Prosecutor Oscar A. Pascua
recommended the filing of information for
reckless imprudence resulting to (sic)
damage to property and physical injuries.
The original complaint was amended
twice: first, impleading Auto Palace Car
Exchange as commercial agent and/or
buyer-seller and second, impleading
Albert Jaucian as principal defendant
doing business under the name and style
of Auto Palace Car Exchange.
61
 Except for Ocfemia, all the defendants
filed separate answers to the complaint.
[Petitioner] Nostradamus Villanueva
claimed that he was no longer the owner
of the car at the time of the mishap
because it was swapped with a Pajero
owned by Albert Jaucian/Auto Palace Car
Exchange. For her part, Linda Gonzales
declared that her presence at the scene of
the accident was upon the request of the
actual owner of the Mitsubishi Lancer
(PHK 201 ’91) [Albert Jaucian] for whom
she had been working as agent/seller. On
the other hand, Auto Palace Car Exchange
represented by Albert Jaucian claimed that
he was not the registered owner of the car.
Moreover, it could not be held subsidiary
liable as employer of Ocfemia because the
latter was off-duty as utility employee at
the time of the incident. Neither was
Ocfemia performing a duty related to his
employment.3
After trial, the trial court found petitioner liable and
ordered him to pay respondent actual, moral and
exemplary damages plus appearance and
attorney’s fees:
WHEREFORE, judgment is hereby
rendered for the plaintiffs, ordering
Nostradamus Villanueva to pay the
amount of ₱99,580 as actual damages,
₱25,000.00 as moral damages,
₱25,000.00 as exemplary damages and
attorney’s fees in the amount of
₱10,000.00 plus appearance fees of
₱500.00 per hearing with legal interest
counted from the date of judgment. In
conformity with the law on equity and in
accordance with the ruling in First Malayan
Lending and Finance Corporation vs.
Court of Appeals (supra), Albert Jaucian is
hereby ordered to indemnify Nostradamus
Villanueva for whatever amount the latter
is hereby ordered to pay under the
judgment.
SO ORDERED.4
The CA upheld the trial court’s decision but deleted
the award for appearance and attorney’s fees
because the justification for the grant was not
stated in the body of the decision. Thus, this
petition for review which raises a singular issue:
MAY THE REGISTERED OWNER OF A
MOTOR VEHICLE BE HELD LIABLE FOR
DAMAGES ARISING FROM A proposition; the trial court held the negative.
VEHICULAR ACCIDENT INVOLVING HIS
MOTOR VEHICLE WHILE BEING
OPERATED BY THE EMPLOYEE OF ITS
BUYER WITHOUT THE LATTER’S
CONSENT AND KNOWLEDGE?5
Yes.
We have consistently ruled that the registered
owner of any vehicle is directly and primarily
responsible to the public and third persons while it
is being operated.6 The rationale behind such
doctrine was explained way back in 1957 in Erezo
vs. Jepte7:
The principle upon which this doctrine is based is
that in dealing with vehicles registered under the
Public Service Law, the public has the right to
assume or presume that the registered owner is
the actual owner thereof, for it would be difficult for
the public to enforce the actions that they may
have for injuries caused to them by the vehicles
being negligently operated if the public should be
required to prove who the actual owner is. How
would the public or third persons know against
whom to enforce their rights in case of subsequent
transfers of the vehicles? We do not imply by his
doctrine, however, that the registered owner may
not recover whatever amount he had paid by virtue
of his liability to third persons from the person to
whom he had actually sold, assigned or conveyed
the vehicle.
Under the same principle the registered
owner of any vehicle, even if not used for
a public service, should primarily be
responsible to the public or to third persons
for injuries caused the latter while the
vehicle is being driven on the highways or
streets. The members of the Court are in
agreement that the defendant-appellant
should be held liable to plaintiff-appellee
for the injuries occasioned to the latter
because of the negligence of the driver,
even if the defendant-appellant was no
longer the owner of the vehicle at the time
of the damage because he had previously
sold it to another. What is the legal basis
for his (defendant-appellant’s) liability?
There is a presumption that the owner of the guilty
vehicle is the defendant-appellant as he is the
registered owner in the Motor Vehicles Office.
Should he not be allowed to prove the truth, that
he had sold it to another and thus shift the
responsibility for the injury to the real and actual
owner? The defendant holds the affirmative of this
62
The Revised Motor Vehicle Law (Act No. 3992, as
amended) provides that no vehicle may be used or
operated upon any public highway unless the
same is property registered. It has been stated that
the system of licensing and the requirement that
each machine must carry a registration number,
conspicuously displayed, is one of the precautions
taken to reduce the danger of injury to pedestrians
and other travelers from the careless management
of automobiles. And to furnish a means of
ascertaining the identity of persons violating the
laws and ordinances, regulating the speed and
operation of machines upon the highways (2
R.C.L. 1176). Not only are vehicles to be
registered and that no motor vehicles are to be
used or operated without being properly registered
for the current year, but that dealers in motor
vehicles shall furnish thee Motor Vehicles Office a
report showing the name and address of each
purchaser of motor vehicle during the previous
month and the manufacturer’s serial number and
motor number. (Section 5(c), Act No. 3992, as
amended.)
Registration is required not to make said
registration the operative act by which ownership
in vehicles is transferred, as in land registration
cases, because the administrative proceeding of
registration does not bear any essential relation to
the contract of sale between the parties (Chinchilla
vs. Rafael and Verdaguer, 39 Phil. 888), but to
permit the use and operation of the vehicle upon
any public highway (section 5 [a], Act No. 3992, as
amended). The main aim of motor vehicle
registration is to identify the owner so that if any
accident happens, or that any damage or injury is
caused by the vehicle on the public highways,
responsibility therefore can be fixed on a definite
individual, the registered owner. Instances are
numerous where vehicles running on public
highways caused accidents or injuries to
pedestrians or other vehicles without positive
identification of the owner or drivers, or with very
scant means of identification. It is to forestall these
circumstances, so inconvenient or prejudicial to
the public, that the motor vehicle registration is
primarily ordained, in the interest of the
determination of persons responsible for damages
or injuries caused on public highways:
One of the principal purposes of motor vehicles
legislation is identification of the vehicle and of the
operator, in case of accident; and another is that
the knowledge that means of detection are always
available may act as a deterrent from lax
observance of the law and of the rules of
conservative and safe operation. Whatever
purpose there may be in these statutes, it is
subordinate at the last to the primary purpose of
rendering it certain that the violator of the law or of
the rules of safety shall not escape because of lack
of means to discover him. The purpose of the
statute is thwarted, and the displayed number
becomes a "share and delusion," if courts would
entertain such defenses as that put forward by
appellee in this case. No responsible person or
corporation could be held liable for the most
outrageous acts of negligence, if they should be
allowed to pace a "middleman" between them and
the public, and escape liability by the manner in
which they recompense servants. (King vs.
Brenham Automobile Co., Inc. 145 S.W. 278, 279.)
With the above policy in mind, the question that
defendant-appellant poses is: should not the
registered owner be allowed at the trial to prove
who the actual and real owner is, and in
accordance with such proof escape or evade
responsibility by and lay the same on the person
actually owning the vehicle? We hold with the trial
court that the law does not allow him to do so; the
law, with its aim and policy in mind, does not
relieve him directly of the responsibility that the law
fixes and places upon him as an incident or
consequence of registration. Were a registered
owner allowed to evade responsibility by proving
who the supposed transferee or owner is, it would
be easy for him, by collusion with others or
otherwise, to escape said responsibility and
transfer the same to an indefinite person, or to one
who possesses no property with which to respond
financially for the damage or injury done. A victim
of recklessness on the public highways is usually
without means to discover or identify the person
actually causing the injury or damage. He has no
means other than by a recourse to the registration
in the Motor Vehicles Office to determine who is
the owner. The protection that the law aims to
extend to him would
become illusory were the registered owner given
the opportunity to escape liability by disproving his
ownership. If the policy of the law is to be enforced
and carried out, the registered owner should not
be allowed to prove the contrary to the prejudice of
the person injured, that is, to prove that a third
person or another has become the owner, so that
he may thereby be relieved of the responsibility to
the injured person.
The above policy and application of the law may
appear quite harsh and would seem to conflict with
truth and justice. We do not think it is so. A
registered owner who has already sold or
transferred a vehicle has the recourse to a third-
party complaint, in the same action brought
against him to recover for the damage or injury
done, against the vendee or transferee of the
63
vehicle. The inconvenience of the suit is no
justification for relieving him of liability; said
inconvenience is the price he pays for failure to
comply with the registration that the law demands
and requires.
In synthesis, we hold that the registered owner, the
defendant-appellant herein, is primarily
responsible for the damage caused to the vehicle
of the plaintiff-appellee, but he (defendant-
appellant) has a right to be indemnified by the real
or actual owner of the amount that he may be
required to pay as damage for the injury caused to
the plaintiff-appellant.8
Petitioner insists that he is not liable for damages
since the driver of the vehicle at the time of the
accident was not an authorized driver of the new
(actual) owner of the vehicle. He claims that the
ruling in First Malayan Leasing and Finance
Corporation vs. CA9 implies that to hold the
registered owner liable for damages, the driver of
the vehicle must have been authorized, allowed
and permitted by its actual owner to operate and
drive it. Thus, if the vehicle is driven without the
knowledge and consent of the actual owner, then
the registered owner cannot be held liable for
damages.
He further argues that this was the underlying
theory behind Duavit vs. CA10 wherein the court
absolved the registered owner from liability after
finding that the vehicle was virtually stolen from the
owner’s garage by a person who was neither
authorized nor employed by the owner. Petitioner
concludes that the ruling in Duavit and not the one
in First Malayan should be applicable to him.
Petitioner’s argument lacks merit. Whether the
driver is authorized or not by the actual owner is
irrelevant to determining the liability of the
registered owner who the law holds primarily and
directly responsible for any accident, injury or
death caused by the operation of the vehicle in the
streets and highways. To require the driver of the
vehicle to be authorized by the actual owner
before the registered owner can be held
accountable is to defeat the very purpose why
motor vehicle legislations are enacted in the first
place.
Furthermore, there is nothing in First
Malayan which even remotely suggests that the
driver must be authorized before the registered
owner can be held accountable. In First Malayan,
the registered owner, First Malayan Corporation,
was held liable for damages arising from the
accident even if the vehicle involved was already
owned by another party:
This Court has consistently ruled that
regardless of who the actual owner is of a
motor vehicle might be, the registered
owner is the operator of the same with
respect to the public and third persons,
and as such, directly and primarily
responsible for the consequences of its
operation. In contemplation of law, the
owner/operator of record is the employer
of the driver, the actual operator and
employer being considered merely as his
agent (MYC-Agro-Industrial Corporation
vs. Vda. de Caldo, 132 SCRA 10,
citing Vargas vs. Langcay, 6 SCRA
174; Tamayo vs. Aquino, 105 Phil. 949).
‘We believe that it is immaterial
whether or not the driver was
actually employed by the operator
of record. It is even not necessary
to prove who the actual owner of
the vehicle and the employer of the
driver is. Granting that, in this
case, the father of the driver is the
actual owner and that he is the
actual employer, following the
well-settled principle that the
operator of record continues to be
the operator of the vehicle in
contemplation of law, as regards
the public and third person, and as
such is responsible for the
consequences incident to its
operation, we must hold and
consider such owner-operator of
record as the employer, in
contemplation of law, of the driver.
And, to give effect to this policy of
law as enunciated in the above
cited decisions of this Court, we
must now extend the same and
consider the actual operator and
employer as the agent of the
operator of record.’11
Contrary to petitioner’s position, the First
Malayan ruling is applicable to him since the case
involves the same set of facts ― the registered owner
had previously sold the vehicle to someone else and
was being driven by an employee of the new (actual)
owner. Duavit is inapplicable since the vehicle there
was not transferred to another; the registered and the
actual owner was one and the same person.
Besides, in Duavit, the defense of the registered
owner, Gilberto Duavit, was that the vehicle was
64
practically stolen from his garage by Oscar Sabiano,
as affirmed by the latter:
Defendant Sabiano, in his testimony,
categorically admitted that he took the jeep
from the garage of defendant Duavit
without the consent and authority of the
latter. He testified further that Duavit even
filed charges against him for the theft of the
jeep but which Duavit did not push through
as his (Sabiano’s) parents apologized to
Duavit on his behalf.12
As correctly pointed out by the CA,
the Duavit ruling is not applicable to petitioner’s
case since the circumstance of unauthorized use
was not present. He in fact voluntarily delivered his
car to Albert Jaucian as part of the downpayment
for a vehicle he purchased from Jaucian. Thus, he
could not claim that the vehicle was stolen from
him since he voluntarily ceded possession thereof
to Jaucian. It was the latter, as the new (actual)
owner, who could have raised the defense of theft
to prove that he was not liable for the acts of his
employee Ocfemia. Thus, there is no reason to
apply the Duavit ruling to this case.
The ruling in First Malayan has been reiterated
in BA Finance Corporation vs. CA13 and more
recently in Aguilar, Sr. vs. Commercial Savings
Bank.14 In BA Finance, we held the registered
owner liable even if, at the time of the accident, the
vehicle was leased by another party and was
driven by the lessee’s employee. In Aguilar, the
registered owner-bank answered for damages for
the accident even if the vehicle was being driven
by the Vice-President of the Bank in his private
capacity and not as an officer of the Bank, as
claimed by the Bank. We find no reason to deviate
from these decisions.
The main purpose of vehicle registration is the
easy identification of the owner who can be held
responsible for any accident, damage or injury
caused by the vehicle. Easy identification prevents
inconvenience and prejudice to a third party
injured by one who is unknown or unidentified. To
allow a registered owner to escape liability by
claiming that the driver was not authorized by the
new (actual) owner results in the public detriment
the law seeks to avoid.
Finally, the issue of whether or not the driver of the
vehicle during the accident was authorized is not
at all relevant to determining the liability of the
registered owner. This must be so if we are to
comply with the rationale and principle behind the
registration requirement under the motor vehicle
law.
WHEREFORE, the petition is hereby DENIED.
The January 26, 2000 decision of the Court of
Appeals is AFFIRMED.
SO ORDERED.
Panganiban, Sandoval-Gutierrez, and Carpio
Morales*, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-25172 May 24, 1974
LUIS MA. ARANETA, petitioner,
vs.
ANTONIO R. DE JOYA, respondent.
Araneta, Mendoza & Papa for petitioner.
Jose F. Espinosa for respondent.
CASTRO, J.:p
Petition for review of the decision of the Court of
Appeals in CA-G.R. 34277-R ordering Luis Ma.
Araneta (hereinafter referred to as the petitioner)
to indemnify Antonio R. de Joya (hereinafter
referred to as the respondent) for one-third of the
sum of P5,043.20 which the latter was adjudged to
pay the Ace Advertising Agency, Inc., the plaintiff
in the recovery suit below.
Sometime in November 1952 the respondent, then
general manager of the Ace Advertising, proposed
to the board of directors1 that an employee,
Ricardo Taylor, be sent to the United States to take
up special studies in television. The board,
however, failed to act on the proposal.
Nevertheless, in September 1953 the respondent
sent Taylor abroad. J. Antonio Araneta, a
company director, inquired about the trip and was
assured by the respondent that Taylor's expenses
would be defrayed not by the company but by
other parties. This was thereafter confirmed by the
respondent in a memorandum.
While abroad, from September 1, 1953 to March
15, 1954, Taylor continued to receive his salaries.
The items corresponding to his salaries appeared
65
in vouchers prepared upon the orders of, and
approved by, the respondent and were included in
the semi-monthly payroll checks for the employees
of the corporation. The petitioner signed three of
these checks on November 27, December 15 and
December 29, 1953. The others were signed by
either the respondent, or Vicente Araneta
(company treasurer) who put up part of the bill
connected with Taylor's trip and also handed him
letters for delivery in the United States. The Ace
Advertising disbursed P5,043.20, all told, on
account of Taylor's travel and studies.
On August 23, 1954 the Ace Advertising filed a
complaint with the court of first instance of Manila
against the respondent for recovery of the total
sum disbursed to Taylor, alleging that the trip was
made without its knowledge, authority or
ratification. The respondent, in his answer, denied
the charge and claimed that the trip was
nonetheless ratified by the company's board of
directors, and that in any event under the by-laws
he had the discretion, as general manager, to
authorize the trip which was for the company's
benefit..
A 3rd-party complaint was also filed by the
respondent against Vicente Araneta, the petitioner
and Ricardo Taylor. The respondent proved that
Vicente Araneta, as treasurer of the firm, signed a
check representing the company's share of the
transportation expense of Taylor to the United
States, and that a series of payroll checks from
September 15, 1953 to December 31, 1953,
inclusive, which included the salaries of Taylor,
was signed by Vicente Araneta and the petitioner
who is a vice-president of the company. Both
Aranetas disowned any personal liability, claiming
that they signed the checks in good faith as they
were approved by the respondent..
On April 13, 1964 the trial court rendered judgment
ordering the respondent to pay the Ace Advertising
"the sum of P5,043.20 with interest at the legal rate
from August 23, 1954 until full payment," and
dismissing the 3rd-party complaint.
The respondent appealed to the Court of Appeals,
which on August 2, 1965, rendered a decision
affirming the trial court's judgment in favor of the
Ace Advertising but reversing the dismissal of the
3rd-party complaint. The appellate court found as
a fact that Taylor's trip had been neither authorized
nor ratified by the company.
The appellate court's full statement of its
categorical and unequivocal findings of fact on the
nature and extent of the participation of the
petitioner as well as Vicente Araneta is hereunder
quoted:
The evidence not only is clear, but is
even not disputed at all by Vicente and
Luis Araneta who neither of them took the
witness stand to refute appellant's
evidence, that as to Vicente it was to him
that appellant first broached the subject-
matter of sending Taylor to America, that
Vicente Araneta evinced unusual interest,
and went to the extent of entrusting Taylor
with letters for delivery to certain principals
of Gregorio Araneta, Inc. in the United
States, and he even signed the check for
P105.20 to cover expenses for his tax
clearance, documentary stamps and
passport fees, in connection with the trip,
on 8 September, 1953, and then on 5
October, 1953, still another check for
P868.00 which was half the amount for his
plane ticket; and as to Luis Araneta, it not
at all being disputed that when Taylor was
already in America, his salaries while
abroad were paid on vouchers and checks
signed either by him or by Vicente, or by
appellant himself; because of all these, the
conclusion is forced upon this Court that it
could not but have been but that both
Vicente and Luis were informed and gave
their approval to Taylor's trip, and to the
payment of his trip expenses and salaries
during his absence, from corporate funds;
if this was the case as it was, there can be
no question but that they two were also
privy to the unauthorized disbursement of
the corporate moneys jointly with the
appellant; what had happened was in truth
and in fact a venture by them given their
stamp of approval; and as it was an
unauthorized act of expenditure of
corporate funds, and it was these three
without whose acts the same could not
have happened, the juridical situation was
a simple quasi-delict by them committed
upon the corporation, for which solidary
liability should have been imposed upon all
in the first place, Art. 2194, New Civil
Code; and only De Joya having been sued
and made liable by the corporation, it was
the right of the latter to ask that his two joint
tortfeasors be made to shoulder their
proportional responsibility. (emphasis
supplied)
The basic legal issue is whether the petitioner is
guilty of a quasi-delict as held below.
66
It is our view, and we so hold, that the judgment of
the Court of Appeals should be upheld. The
petitioner's assertion that he signed the
questioned payroll checks in good faith has not
been substantiated, he in particular not having
testified or offered testimony to prove such claim.
Upon the contrary, in spite of his being a vice-
president and director of the Ace Advertising, the
petitioner remained passive, throughout the period
of Taylor's stay abroad, concerning the
unauthorized disbursements of corporate funds for
the latter. This plus the fact that he even approved
thrice payroll checks for the payment of Taylor's
salary, demonstrate quite distinctly that the
petitioner neglected to perform his duties properly,
to the damage of the firm of which he was an
officer. The fact that he was occupying a
contractual position at the Ace Advertising is of no
moment. The existence of a contract between the
parties, as has been repeatedly held by this Court,
constitutes no bar to the commission of a tort by
one against the other and the consequent
recovery of damages.2
ACCORDINGLY, the judgment of the Court of
Appeals is affirmed, at petitioner's cost.
Makalintal, C.J., Makasiar, Esguerra and Muñoz
Palma, JJ., concur.
Teehankee, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12219 March 15, 1918
AMADO PICART, plaintiff-appellant,
vs.
FRANK SMITH, JR., defendant-appellee.
Alejo Mabanag for appellant.
G. E. Campbell for appellee.
STREET, J.:
In this action the plaintiff, Amado Picart, seeks to
recover of the defendant, Frank Smith, jr., the sum
of P31,000, as damages alleged to have been
caused by an automobile driven by the defendant.
From a judgment of the Court of First Instance of
the Province of La Union absolving the defendant
from liability the plaintiff has appealed.
The occurrence which gave rise to the institution
of this action took place on December 12, 1912, on
the Carlatan Bridge, at San Fernando, La Union. It
appears that upon the occasion in question the
plaintiff was riding on his pony over said bridge.
Before he had gotten half way across, the
defendant approached from the opposite direction
in an automobile, going at the rate of about ten or
twelve miles per hour. As the defendant neared the
bridge he saw a horseman on it and blew his horn
to give warning of his approach. He continued his
course and after he had taken the bridge he gave
two more successive blasts, as it appeared to him
that the man on horseback before him was not
observing the rule of the road.
The plaintiff, it appears, saw the automobile
coming and heard the warning signals. However,
being perturbed by the novelty of the apparition or
the rapidity of the approach, he pulled the pony
closely up against the railing on the right side of
the bridge instead of going to the left. He says that
the reason he did this was that he thought he did
not have sufficient time to get over to the other
side. The bridge is shown to have a length of about
75 meters and a width of 4.80 meters. As the
automobile approached, the defendant guided it
toward his left, that being the proper side of the
road for the machine. In so doing the defendant
assumed that the horseman would move to the
other side. The pony had not as yet exhibited
fright, and the rider had made no sign for the
automobile to stop. Seeing that the pony was
apparently quiet, the defendant, instead of veering
to the right while yet some distance away or
slowing down, continued to approach directly
toward the horse without diminution of speed.
When he had gotten quite near, there being then
no possibility of the horse getting across to the
other side, the defendant quickly turned his car
sufficiently to the right to escape hitting the horse
alongside of the railing where it as then standing;
but in so doing the automobile passed in such
close proximity to the animal that it became
frightened and turned its body across the bridge
with its head toward the railing. In so doing, it as
struck on the hock of the left hind leg by the flange
of the car and the limb was broken. The horse fell
and its rider was thrown off with some violence.
From the evidence adduced in the case we believe
that when the accident occurred the free space
where the pony stood between the automobile and
the railing of the bridge was probably less than one
and one half meters. As a result of its injuries the
horse died. The plaintiff received contusions which
caused temporary unconsciousness and required
medical attention for several days.
67
The question presented for decision is whether or
not the defendant in maneuvering his car in the
manner above described was guilty of negligence
such as gives rise to a civil obligation to repair the
damage done; and we are of the opinion that he is
so liable. As the defendant started across the
bridge, he had the right to assume that the horse
and the rider would pass over to the proper side;
but as he moved toward the center of the bridge it
was demonstrated to his eyes that this would not
be done; and he must in a moment have perceived
that it was too late for the horse to cross with safety
in front of the moving vehicle. In the nature of
things this change of situation occurred while the
automobile was yet some distance away; and from
this moment it was not longer within the power of
the plaintiff to escape being run down by going to
a place of greater safety. The control of the
situation had then passed entirely to the
defendant; and it was his duty either to bring his
car to an immediate stop or, seeing that there were
no other persons on the bridge, to take the other
side and pass sufficiently far away from the horse
to avoid the danger of collision. Instead of doing
this, the defendant ran straight on until he was
almost upon the horse. He was, we think, deceived
into doing this by the fact that the horse had not
yet exhibited fright. But in view of the known nature
of horses, there was an appreciable risk that, if the
animal in question was unacquainted with
automobiles, he might get exited and jump under
the conditions which here confronted him. When
the defendant exposed the horse and rider to this
danger he was, in our opinion, negligent in the eye
of the law.
The test by which to determine the existence of
negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged
negligent act use that person would have used in
the same situation? If not, then he is guilty of
negligence. The law here in effect adopts the
standard supposed to be supplied by the
imaginary conduct of the discreet paterfamilias of
the Roman law. The existence of negligence in a
given case is not determined by reference to the
personal judgment of the actor in the situation
before him. The law considers what would be
reckless, blameworthy, or negligent in the man of
ordinary intelligence and prudence and
determines liability by that.
The question as to what would constitute the
conduct of a prudent man in a given situation must
of course be always determined in the light of
human experience and in view of the facts involved
in the particular case. Abstract speculations
cannot here be of much value but this much can
be profitably said: Reasonable men govern their
conduct by the circumstances which are before
them or known to them. They are not, and are not
supposed to be, omniscient of the future. Hence
they can be expected to take care only when there
is something before them to suggest or warn of
danger. Could a prudent man, in the case under
consideration, foresee harm as a result of the
course actually pursued? If so, it was the duty of
the actor to take precautions to guard against that
harm. Reasonable foresight of harm, followed by
ignoring of the suggestion born of this prevision, is
always necessary before negligence can be held
to exist. Stated in these terms, the proper criterion
for determining the existence of negligence in a
given case is this: Conduct is said to be negligent
when a prudent man in the position of the
tortfeasor would have foreseen that an effect
harmful to another was sufficiently probable to
warrant his foregoing conduct or guarding against
its consequences.
Applying this test to the conduct of the defendant
in the present case we think that negligence is
clearly established. A prudent man, placed in the
position of the defendant, would in our opinion,
have recognized that the course which he was
pursuing was fraught with risk, and would
therefore have foreseen harm to the horse and the
rider as reasonable consequence of that course.
Under these circumstances the law imposed on
the defendant the duty to guard against the
threatened harm.
It goes without saying that the plaintiff himself was
not free from fault, for he was guilty of antecedent
negligence in planting himself on the wrong side of
the road. But as we have already stated, the
defendant was also negligent; and in such case
the problem always is to discover which agent is
immediately and directly responsible. It will be
noted that the negligent acts of the two parties
were not contemporaneous, since the negligence
of the defendant succeeded the negligence of the
plaintiff by an appreciable interval. Under these
circumstances the law is that the person who has
the last fair chance to avoid the impending harm
and fails to do so is chargeable with the
consequences, without reference to the prior
negligence of the other party.
The decision in the case of Rkes vs. Atlantic, Gulf
and Pacific Co. (7 Phil. Rep., 359) should perhaps
be mentioned in this connection. This Court there
held that while contributory negligence on the part
of the person injured did not constitute a bar to
recovery, it could be received in evidence to
reduce the damages which would otherwise have
been assessed wholly against the other party. The
defendant company had there employed the
68
plaintiff, as a laborer, to assist in transporting iron
rails from a barge in Manila harbor to the
company's yards located not far away. The rails
were conveyed upon cars which were hauled
along a narrow track. At certain spot near the
water's edge the track gave way by reason of the
combined effect of the weight of the car and the
insecurity of the road bed. The car was in
consequence upset; the rails slid off; and the
plaintiff's leg was caught and broken. It appeared
in evidence that the accident was due to the effects
of the typhoon which had dislodged one of the
supports of the track. The court found that the
defendant company was negligent in having failed
to repair the bed of the track and also that the
plaintiff was, at the moment of the accident, guilty
of contributory negligence in walking at the side of
the car instead of being in front or behind. It was
held that while the defendant was liable to the
plaintiff by reason of its negligence in having failed
to keep the track in proper repair nevertheless the
amount of the damages should be reduced on
account of the contributory negligence in the
plaintiff. As will be seen the defendant's
negligence in that case consisted in an omission
only. The liability of the company arose from its
responsibility for the dangerous condition of its
track. In a case like the one now before us, where
the defendant was actually present and operating
the automobile which caused the damage, we do
not feel constrained to attempt to weigh the
negligence of the respective parties in order to
apportion the damage according to the degree of
their relative fault. It is enough to say that the
negligence of the defendant was in this case the
immediate and determining cause of the accident
and that the antecedent negligence of the plaintiff
was a more remote factor in the case.
A point of minor importance in the case is indicated
in the special defense pleaded in the defendant's
answer, to the effect that the subject matter of the
action had been previously adjudicated in the court
of a justice of the peace. In this connection it
appears that soon after the accident in question
occurred, the plaintiff caused criminal proceedings
to be instituted before a justice of the peace
charging the defendant with the infliction of serious
injuries (lesiones graves). At the preliminary
investigation the defendant was discharged by the
magistrate and the proceedings were dismissed.
Conceding that the acquittal of the defendant at
the trial upon the merits in a criminal prosecution
for the offense mentioned would be res adjudicata
upon the question of his civil liability arising from
negligence -- a point upon which it is unnecessary
to express an opinion -- the action of the justice of
the peace in dismissing the criminal proceeding
upon the preliminary hearing can have no effect.
(See U. S. vs. Banzuela and Banzuela, 31 Phil.
Rep., 564.)
From what has been said it results that the
judgment of the lower court must be reversed, and
judgment is her rendered that the plaintiff recover
of the defendant the sum of two hundred pesos
(P200), with costs of other instances. The sum
here awarded is estimated to include the value of
the horse, medical expenses of the plaintiff, the
loss or damage occasioned to articles of his
apparel, and lawful interest on the whole to the
date of this recovery. The other damages claimed
by the plaintiff are remote or otherwise of such
character as not to be recoverable. So ordered.
Arellano, C.J., Torres, Carson, Araullo,
Avanceña, and Fisher, JJ., concur.
Johnson, J., reserves his vote.
Separate Opinions
MALCOLM, J., concurring:
After mature deliberation, I have finally decided to
concur with the judgment in this case. I do so
because of my understanding of the "last clear
chance" rule of the law of negligence as
particularly applied to automobile accidents. This
rule cannot be invoked where the negligence of the
plaintiff is concurrent with that of the defendant.
Again, if a traveler when he reaches the point of
collision is in a situation to extricate himself and
avoid injury, his negligence at that point will
prevent a recovery. But Justice Street finds as a
fact that the negligent act of the interval of time,
and that at the moment the plaintiff had no
opportunity to avoid the accident. Consequently,
the "last clear chance" rule is applicable. In other
words, when a traveler has reached a point where
he cannot extricate himself and vigilance on his
part will not avert the injury, his negligence in
reaching that position becomes the condition and
not the proximate cause of the injury and will not
preclude a recovery. (Note especially Aiken vs.
Metcalf [1917], 102 Atl., 330.)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12986 March 31, 1966
69
THE SPOUSES BERNABE AFRICA and
SOLEDAD C. AFRICA, and the HEIRS OF
DOMINGA ONG, petitioners-appellants,
vs.
CALTEX (PHIL.), INC., MATEO BOQUIREN and
THE COURT OF APPEALS, respondents-
appellees.
Ross, Selph, Carrascoso and Janda for the
respondents.
Bernabe Africa, etc. for the petitioners.
MAKALINTAL., J.:
This case is before us on a petition for review of
the decision of the Court of Appeals, which
affirmed that of the Court of First Instance of
Manila dismissing petitioners' second amended
complaint against respondents.
The action is for damages under Articles 1902 and
1903 of the old Civil Code. It appears that in the
afternoon of March 18, 1948 a fire broke out at the
Caltex service station at the corner of Antipolo
street and Rizal Avenue, Manila. It started while
gasoline was being hosed from a tank truck into
the underground storage, right at the opening of
the receiving tank where the nozzle of the hose
was inserted. The fire spread to and burned
several neighboring houses, including the
personal properties and effects inside them. Their
owners, among them petitioners here, sued
respondents Caltex (Phil.), Inc. and Mateo
Boquiren, the first as alleged owner of the station
and the second as its agent in charge of operation.
Negligence on the part of both of them was
attributed as the cause of the fire.
The trial court and the Court of Appeals found that
petitioners failed to prove negligence and that
respondents had exercised due care in the
premises and with respect to the supervision of
their employees.
The first question before Us refers to the
admissibility of certain reports on the fire prepared
by the Manila Police and Fire Departments and by
a certain Captain Tinio of the Armed Forces of the
Philippines. Portions of the first two reports are as
follows:
1. Police Department report: —
Investigation disclosed that at
about 4:00 P.M. March 18, 1948,
while Leandro Flores was
transferring gasoline from a tank
truck, plate No. T-5292 into the
underground tank of the Caltex
Gasoline Station located at the
corner of Rizal Avenue and
Antipolo Street, this City, an
unknown Filipino lighted a
cigarette and threw the burning
match stick near the main valve of
the said underground tank. Due to
the gasoline fumes, fire suddenly
blazed. Quick action of Leandro
Flores in pulling off the gasoline
hose connecting the truck with the
underground tank prevented a
terrific explosion. However, the
flames scattered due to the hose
from which the gasoline was
spouting. It burned the truck and
the following accessorias and
residences.
2. The Fire Department report: —
In connection with their allegation that the
premises was (sic) subleased for the
installation of a coca-cola and cigarette
stand, the complainants furnished this
Office a copy of a photograph taken during
the fire and which is submitted herewith. it
appears in this picture that there are in the
premises a coca-cola cooler and a rack
which according to information gathered in
the neighborhood contained cigarettes
and matches, installed between the
gasoline pumps and the underground
tanks.
The report of Captain Tinio reproduced information
given by a certain Benito Morales regarding the
history of the gasoline station and what the chief of
the fire department had told him on the same
subject.
The foregoing reports were ruled out as "double
hearsay" by the Court of Appeals and hence
inadmissible. This ruling is now assigned as error.
It is contended: first, that said reports were
admitted by the trial court without objection on the
part of respondents; secondly, that with respect to
the police report (Exhibit V-Africa) which appears
signed by a Detective Zapanta allegedly "for
Salvador Capacillo," the latter was presented as
witness but respondents waived their right to
cross-examine him although they had the
opportunity to do so; and thirdly, that in any event
the said reports are admissible as an exception to
the hearsay rule under section 35 of Rule 123, now
Rule 130.
70
The first contention is not borne out by the record.
The transcript of the hearing of September 17,
1953 (pp. 167-170) shows that the reports in
question, when offered as evidence, were
objected to by counsel for each of respondents on
the ground that they were hearsay and that they
were "irrelevant, immaterial and impertinent."
Indeed, in the court's resolution only Exhibits J, K,
K-5 and X-6 were admitted without objection; the
admission of the others, including the disputed
ones, carried no such explanation.
On the second point, although Detective Capacillo
did take the witness stand, he was not examined
and he did not testify as to the facts mentioned in
his alleged report (signed by Detective Zapanta).
All he said was that he was one of those who
investigated "the location of the fire and, if
possible, gather witnesses as to the occurrence,
and that he brought the report with him. There was
nothing, therefore, on which he need be cross-
examined; and the contents of the report, as to
which he did not testify, did not thereby become
competent evidence. And even if he had testified,
his testimony would still have been objectionable
as far as information gathered by him from third
persons was concerned.
Petitioners maintain, however, that the reports in
themselves, that is, without further testimonial
evidence on their contents, fall within the scope of
section 35, Rule 123, which provides that "entries
in official records made in the performance of his
duty by a public officer of the Philippines, or by a
person in the performance of a duty specially
enjoined by law, are prima facie evidence of the
facts therein stated."
There are three requisites for admissibility under
the rule just mentioned: (a) that the entry was
made by a public officer, or by another person
specially enjoined by law to do so; (b) that it was
made by the public officer in the performance of
his duties, or by such other person in the
performance of a duty specially enjoined by law;
and (c) that the public officer or other person had
sufficient knowledge of the facts by him stated,
which must have been acquired by him personally
or through official information (Moran, Comments
on the Rules of Court, Vol. 3 [1957] p. 398).
Of the three requisites just stated, only the last
need be considered here. Obviously the material
facts recited in the reports as to the cause and
circumstances of the fire were not within the
personal knowledge of the officers who conducted
the investigation. Was knowledge of such facts,
however, acquired by them through official
information? As to some facts the sources thereof
are not even identified. Others are attributed to
Leopoldo Medina, referred to as an employee at
the gas station were the fire occurred; to Leandro
Flores, driver of the tank truck from which gasoline
was being transferred at the time to the
underground tank of the station; and to respondent
Mateo Boquiren, who could not, according to
Exhibit V-Africa, give any reason as to the origin of
the fire. To qualify their statements as "official
information" acquired by the officers who prepared
the reports, the persons who made the statements
not only must have personal knowledge of the
facts stated but must have the duty to give such
statements for record.1
The reports in question do not constitute an
exception to the hearsay rule; the facts stated
therein were not acquired by the reporting officers
through official information, not having been given
by the informants pursuant to any duty to do so.
The next question is whether or not, without proof
as to the cause and origin of the fire, the doctrine
of res ipsa loquitur should apply so as to presume
negligence on the part of appellees. Both the trial
court and the appellate court refused to apply the
doctrine in the instant case on the grounds that "as
to (its) applicability ... in the Philippines, there
seems to he nothing definite," and that while the
rules do not prohibit its adoption in appropriate
cases, "in the case at bar, however, we find no
practical use for such doctrine." The question
deserves more than such summary dismissal. The
doctrine has actually been applied in this
jurisdiction, in the case of Espiritu vs. Philippine
Power and Development Co. (CA-G.R. No. 3240-
R, September 20, 1949), wherein the decision of
the Court of Appeals was penned by Mr. Justice
J.B.L. Reyes now a member of the Supreme
Court.
The facts of that case are stated in the decision as
follows:
In the afternoon of May 5, 1946, while the
plaintiff-appellee and other companions
were loading grass between the
municipalities of Bay and Calauan, in the
province of Laguna, with clear weather
and without any wind blowing, an electric
transmission wire, installed and
maintained by the defendant Philippine
Power and Development Co., Inc.
alongside the road, suddenly parted, and
one of the broken ends hit the head of the
plaintiff as he was about to board the truck.
As a result, plaintiff received the full shock
71
 of 4,400 volts carried by the wire and was
knocked unconscious to the ground. The
electric charge coursed through his body
and caused extensive and serious multiple
burns from skull to legs, leaving the bone
exposed in some parts and causing
intense pain and wounds that were not
completely healed when the case was
tried on June 18, 1947, over one year after
the mishap.
The defendant therein disclaimed liability on the
ground that the plaintiff had failed to show any
specific act of negligence, but the appellate court
overruled the defense under the doctrine of res
ipsa loquitur. The court said:
The first point is directed against the
sufficiency of plaintiff's evidence to place
appellant on its defense. While it is the
rule, as contended by the appellant, that in
case of noncontractual negligence,
or culpa aquiliana, the burden of proof is
on the plaintiff to establish that the
proximate cause of his injury was the
negligence of the defendant, it is also a
recognized principal that "where the thing
which caused injury, without fault of the
injured person, is under the exclusive
control of the defendant and the injury is
such as in the ordinary course of things
does not occur if he having such control
use proper care, it affords reasonable
evidence, in the absence of the
explanation, that the injury arose from
defendant's want of care."
And the burden of evidence is shifted to
him to establish that he has observed due
care and diligence. (San Juan Light &
Transit Co. v. Requena, 244, U.S. 89, 56
L. ed. 680.) This rule is known by the name
of res ipsa loquitur (the transaction speaks
for itself), and is peculiarly applicable to the
case at bar, where it is unquestioned that
the plaintiff had every right to be on the
highway, and the electric wire was under
the sole control of defendant company. In
the ordinary course of events, electric
wires do not part suddenly in fair weather
and injure people, unless they are
subjected to unusual strain and stress or
there are defects in their installation,
maintenance and supervision; just as
barrels do not ordinarily roll out of the
warehouse windows to injure passersby,
unless some one was negligent. (Byrne v.
Boadle, 2 H & Co. 722; 159 Eng. Reprint
299, the leading case that established that
rule). Consequently, in the absence of
contributory negligence (which is
admittedly not present), the fact that the
wire snapped suffices to raise a
reasonable presumption of negligence in
its installation, care and maintenance.
Thereafter, as observed by Chief Baron
Pollock, "if there are any facts inconsistent
with negligence, it is for the defendant to
prove."
It is true of course that decisions of the Court of
Appeals do not lay down doctrines binding on the
Supreme Court, but we do not consider this a
reason for not applying the particular doctrine
of res ipsa loquitur in the case at bar. Gasoline is
a highly combustible material, in the storage and
sale of which extreme care must be taken. On the
other hand, fire is not considered a fortuitous
event, as it arises almost invariably from some act
of man. A case strikingly similar to the one before
Us is Jones vs. Shell Petroleum Corporation, et al.,
171 So. 447:
Arthur O. Jones is the owner of a building
in the city of Hammon which in the year
1934 was leased to the Shell Petroleum
Corporation for a gasoline filling station.
On October 8, 1934, during the term of the
lease, while gasoline was being
transferred from the tank wagon, also
operated by the Shell Petroleum
Corporation, to the underground tank of
the station, a fire started with resulting
damages to the building owned by Jones.
Alleging that the damages to his building
amounted to $516.95, Jones sued the
Shell Petroleum Corporation for the
recovery of that amount. The judge of the
district court, after hearing the testimony,
concluded that plaintiff was entitled to a
recovery and rendered judgment in his
favor for $427.82. The Court of Appeals for
the First Circuit reversed this judgment, on
the ground the testimony failed to show
with reasonable certainty any negligence
on the part of the Shell Petroleum
Corporation or any of its agents or
employees. Plaintiff applied to this Court
for a Writ of Review which was granted,
and the case is now before us for
decision.1äwphï1.ñët
In resolving the issue of negligence, the Supreme
Court of Louisiana held:
Plaintiff's petition contains two distinct
charges of negligence — one relating to
72
the cause of the fire and the other relating
to the spreading of the gasoline about the
filling station.
Other than an expert to assess the
damages caused plaintiff's building by the
fire, no witnesses were placed on the
stand by the defendant.
Taking up plaintiff's charge of negligence
relating to the cause of the fire, we find it
established by the record that the filling
station and the tank truck were under the
control of the defendant and operated by
its agents or employees. We further find
from the uncontradicted testimony of
plaintiff's witnesses that fire started in the
underground tank attached to the filling
station while it was being filled from the
tank truck and while both the tank and the
truck were in charge of and being operated
by the agents or employees of the
defendant, extended to the hose and tank
truck, and was communicated from the
burning hose, tank truck, and escaping
gasoline to the building owned by the
plaintiff.
Predicated on these circumstances and
the further circumstance of defendant's
failure to explain the cause of the fire or to
show its lack of knowledge of the cause,
plaintiff has evoked the doctrine of res ipsa
loquitur. There are many cases in which
the doctrine may be successfully invoked
and this, we think, is one of them.
Where the thing which caused the injury
complained of is shown to be under the
management of defendant or his servants
and the accident is such as in the ordinary
course of things does not happen if those
who have its management or control use
proper care, it affords reasonable
evidence, in absence of explanation by
defendant, that the accident arose from
want of care. (45 C.J. #768, p. 1193).
This statement of the rule of res ipsa
loquitur has been widely approved and
adopted by the courts of last resort. Some
of the cases in this jurisdiction in which the
doctrine has been applied are the
following, viz.: Maus v. Broderick, 51 La.
Ann. 1153, 25 So. 977; Hebert v. Lake
Charles Ice, etc., Co., 111 La. 522, 35 So.
731, 64 L.R.A. 101, 100 Am. St. Rep. 505;
Willis v. Vicksburg, etc., R. Co., 115 La. 63,
38 So. 892; Bents v. Page, 115 La. 560, 39
So. 599.
The principle enunciated in the aforequoted case
applies with equal force here. The gasoline station,
with all its appliances, equipment and employees,
was under the control of appellees. A fire occurred
therein and spread to and burned the neighboring
houses. The persons who knew or could have
known how the fire started were appellees and
their employees, but they gave no explanation
thereof whatsoever. It is a fair and reasonable
inference that the incident happened because of
want of care.
In the report submitted by Captain Leoncio
Mariano of the Manila Police Department (Exh. X-
1 Africa) the following appears:
Investigation of the basic complaint
disclosed that the Caltex Gasoline Station
complained of occupies a lot
approximately 10 m x 10 m at the
southwest corner of Rizal Avenue and
Antipolo. The location is within a very busy
business district near the Obrero Market, a
railroad crossing and very thickly
populated neighborhood where a great
number of people mill around t
until
gasoline
tever be theWactjvities of these peopleor
lighting a cigarette cannot be excluded and
this constitute a secondary hazard to its
operation which in turn endangers the
entire neighborhood to conflagration.
Furthermore, aside from precautions
already taken by its operator the concrete
walls south and west adjoining the
neighborhood are only 2-1/2 meters high
at most and cannot avoid the flames from
leaping over it in case of fire.
Records show that there have been two
cases of fire which caused not only
material damages but desperation and
also panic in the neighborhood.
Although the soft drinks stand had been
eliminated, this gasoline service station is
also used by its operator as a garage and
repair shop for his fleet of taxicabs
numbering ten or more, adding another
risk to the possible outbreak of fire at this
73
 already small but crowded gasoline
station.
The foregoing report, having been submitted by a
police officer in the performance of his duties on
the basis of his own personal observation of the
facts reported, may properly be considered as an
exception to the hearsay rule. These facts,
descriptive of the location and objective
circumstances surrounding the operation of the
gasoline station in question, strengthen the
presumption of negligence under the doctrine of
res ipsa loquitur, since on their face they called for
more stringent measures of caution than those
which would satisfy the standard of due diligence
under ordinary circumstances. There is no more
eloquent demonstration of this than the statement
of Leandro Flores before the police investigator.
Flores was the driver of the gasoline tank wagon
who, alone and without assistance, was
transferring the contents thereof into the
underground storage when the fire broke out. He
said: "Before loading the underground tank there
were no people, but while the loading was going
on, there were people who went to drink coca-cola
(at the coca-cola stand) which is about a meter
from the hole leading to the underground tank." He
added that when the tank was almost filled he went
to the tank truck to close the valve, and while he
had his back turned to the "manhole" he, heard
someone shout "fire."
Even then the fire possibly would not have spread
to the neighboring houses were it not for another
negligent omission on the part of defendants,
namely, their failure to provide a concrete wall high
enough to prevent the flames from leaping over it.
As it was the concrete wall was only 2-1/2 meters
high, and beyond that height it consisted merely of
galvanized iron sheets, which would predictably
crumple and melt when subjected to intense heat.
Defendants' negligence, therefore, was not only
with respect to the cause of the fire but also with
respect to the spread thereof to the neighboring
houses.
There is an admission on the part of Boquiren in
his amended answer to the second amended
complaint that "the fire was caused through the
acts of a stranger who, without authority, or
permission of answering defendant, passed
through the gasoline station and negligently threw
a lighted match in the premises." No evidence on
this point was adduced, but assuming the
allegation to be true — certainly any unfavorable
inference from the admission may be taken
against Boquiren — it does not extenuate his
negligence. A decision of the Supreme Court of
Texas, upon facts analogous to those of the
present case, states the rule which we find
acceptable here. "It is the rule that those who
distribute a dangerous article or agent, owe a
degree of protection to the public proportionate to
and commensurate with a danger involved ... we
think it is the generally accepted rule as applied to
torts that 'if the effects of the actor's negligent
conduct actively and continuously operate to bring
about harm to another, the fact that the active and
substantially simultaneous operation of the effects
of a third person's innocent, tortious or criminal act
is also a substantial factor in bringing about the
harm, does not protect the actor from liability.'
(Restatement of the Law of Torts, vol. 2, p. 1184,
#439). Stated in another way, "The intention of an
unforeseen and unexpected cause, is not
sufficient to relieve a wrongdoer from
consequences of negligence, if such negligence
directly and proximately cooperates with the
independent cause in the resulting injury."
(MacAfee, et al. vs. Traver's Gas Corporation, 153
S.W. 2nd 442.)
The next issue is whether Caltex should be held
liable for the damages caused to appellants. This
issue depends on whether Boquiren was an
independent contractor, as held by the Court of
Appeals, or an agent of Caltex. This question, in
the light of the facts not controverted, is one of law
and hence may be passed upon by this Court.
These facts are: (1) Boquiren made an admission
that he was an agent of Caltex; (2) at the time of
the fire Caltex owned the gasoline station and all
the equipment therein; (3) Caltex exercised control
over Boquiren in the management of the state; (4)
the delivery truck used in delivering gasoline to the
station had the name of CALTEX painted on it; and
(5) the license to store gasoline at the station was
in the name of Caltex, which paid the license fees.
(Exhibit T-Africa; Exhibit U-Africa; Exhibit X-5
Africa; Exhibit X-6 Africa; Exhibit Y-Africa).
In Boquiren's amended answer to the second
amended complaint, he denied that he directed
one of his drivers to remove gasoline from the
truck into the tank and alleged that the "alleged
driver, if one there was, was not in his employ, the
driver being an employee of the Caltex (Phil.) Inc.
and/or the owners of the gasoline station." It is true
that Boquiren later on amended his answer, and
that among the changes was one to the effect that
he was not acting as agent of Caltex. But then
again, in his motion to dismiss appellants' second
amended complaint the ground alleged was that it
stated no cause of action since under the
allegations thereof he was merely acting as agent
of Caltex, such that he could not have incurred
personal liability. A motion to dismiss on this
74
ground is deemed to be an admission of the facts
alleged in the complaint.
Caltex admits that it owned the gasoline station as
well as the equipment therein, but claims that the
business conducted at the service station in
question was owned and operated by Boquiren.
But Caltex did not present any contract with
Boquiren that would reveal the nature of their
relationship at the time of the fire. There must have
been one in existence at that time. Instead, what
was presented was a license agreement
manifestly tailored for purposes of this case, since
it was entered into shortly before the expiration of
the one-year period it was intended to operate.
This so-called license agreement (Exhibit 5-
Caltex) was executed on November 29, 1948, but
made effective as of January 1, 1948 so as to
cover the date of the fire, namely, March 18, 1948.
This retroactivity provision is quite significant, and
gives rise to the conclusion that it was designed
precisely to free Caltex from any responsibility with
respect to the fire, as shown by the clause that
Caltex "shall not be liable for any injury to person
or property while in the property herein licensed, it
being understood and agreed that LICENSEE
(Boquiren) is not an employee, representative or
agent of LICENSOR (Caltex)."
But even if the license agreement were to govern,
Boquiren can hardly be considered an
independent contractor. Under that agreement
Boquiren would pay Caltex the purely nominal sum
of P1.00 for the use of the premises and all the
equipment therein. He could sell only Caltex
Products. Maintenance of the station and its
equipment was subject to the approval, in other
words control, of Caltex. Boquiren could not assign
or transfer his rights as licensee without the
consent of Caltex. The license agreement was
supposed to be from January 1, 1948 to December
31, 1948, and thereafter until terminated by Caltex
upon two days prior written notice. Caltex could at
any time cancel and terminate the agreement in
case Boquiren ceased to sell Caltex products, or
did not conduct the business with due diligence, in
the judgment of Caltex. Termination of the contract
was therefore a right granted only to Caltex but not
to Boquiren. These provisions of the contract show
the extent of the control of Caltex over Boquiren.
The control was such that the latter was virtually
an employee of the former.
Taking into consideration the fact that the
operator owed his position to the company
and the latter could remove him or
terminate his services at will; that the
service station belonged to the company
and bore its tradename and the operator
sold only the products of the company; that
the equipment used by the operator
belonged to the company and were just
loaned to the operator and the company
took charge of their repair and
maintenance; that an employee of the
company supervised the operator and
conducted periodic inspection of the
company's gasoline and service station;
that the price of the products sold by the
operator was fixed by the company and not
by the operator; and that the receipts
signed by the operator indicated that he
was a mere agent, the finding of the Court
of Appeals that the operator was an agent
of the company and not an independent
contractor should not be disturbed.
To determine the nature of a contract
courts do not have or are not bound to rely
upon the name or title given it by the
contracting parties, should thereby a
controversy as to what they really had
intended to enter into, but the way the
contracting parties do or perform their
respective obligations stipulated or agreed
upon may be shown and inquired into, and
should such performance conflict with the
name or title given the contract by the
parties, the former must prevail over the
latter. (Shell Company of the Philippines,
Ltd. vs. Firemens' Insurance Company of
Newark, New Jersey, 100 Phil. 757).
The written contract was apparently drawn
for the purpose of creating the apparent
relationship of employer and independent
contractor, and of avoiding liability for the
negligence of the employees about the
station; but the company was not satisfied
to allow such relationship to exist. The
evidence shows that it immediately
assumed control, and proceeded to direct
the method by which the work contracted
for should be performed. By reserving the
right to terminate the contract at will, it
retained the means of compelling
submission to its orders. Having elected to
assume control and to direct the means
and methods by which the work has to be
performed, it must be held liable for the
negligence of those performing service
under its direction. We think the evidence
was sufficient to sustain the verdict of the
jury. (Gulf Refining Company v. Rogers,
57 S.W. 2d, 183).
Caltex further argues that the gasoline stored in
the station belonged to Boquiren. But no cash
75
invoices were presented to show that Boquiren
had bought said gasoline from Caltex. Neither was
there a sales contract to prove the same.
As found by the trial court the Africas sustained a
loss of P9,005.80, after deducting the amount of
P2,000.00 collected by them on the insurance of
the house. The deduction is now challenged as
erroneous on the ground that Article 2207 of the
New Civil Code, which provides for the
subrogation of the insurer to the rights of the
insured, was not yet in effect when the loss took
place. However, regardless of the silence of the
law on this point at that time, the amount that
should be recovered be measured by the
damages actually suffered, otherwise the principle
prohibiting unjust enrichment would be violated.
With respect to the claim of the heirs of Ong
P7,500.00 was adjudged by the lower court on the
basis of the assessed value of the property
destroyed, namely, P1,500.00, disregarding the
testimony of one of the Ong children that said
property was worth P4,000.00. We agree that the
court erred, since it is of common knowledge that
the assessment for taxation purposes is not an
accurate gauge of fair market value, and in this
case should not prevail over positive evidence of
such value. The heirs of Ong are therefore entitled
to P10,000.00.
Wherefore, the decision appealed from is reversed
and respondents-appellees are held liable
solidarily to appellants, and ordered to pay them
the aforesaid sum of P9,005.80 and P10,000.00,
respectively, with interest from the filing of the
complaint, and costs.
Bengzon, C.J., Bautista Angelo, Concepcion,
Reyes, J.B.L., Barrera, Regala, Bengzon, J.P.,
Zaldivar and Sanchez, JJ., concur.
Dizon, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 88694 January 11, 1993
ALBENSON ENTERPRISES CORP., JESSE
YAP, AND BENJAMIN MENDIONA, petitioners,
vs.
THE COURT OF APPEALS AND EUGENIO S.
BALTAO, respondents.
Puruganan, Chato, Chato & Tan for petitioners.
Lino M. Patajo, Francisco Ma. Chanco, Ananiano
Desierto and Segundo Mangohig for private
respondent.
BIDIN, J.:
This petition assails the decision of respondent
Court of Appeals in
CA-GR CV No. 14948 entitled "Eugenio S. Baltao,
plaintiff-appellee vs. Albenson Enterprises
Corporation, et al, defendants-appellants", which
modified the judgment of the Regional Trial Court
of Quezon City, Branch XCVIII in Civil Case No. Q-
40920 and ordered petitioner to pay private
respondent, among others, the sum of
P500,000.00 as moral damages and attorney's
fees in the amount of P50,000.00.
The facts are not disputed.
In September, October, and November 1980,
petitioner Albenson Enterprises Corporation
(Albenson for short) delivered to Guaranteed
Industries, Inc. (Guaranteed for short) located at
3267 V. Mapa Street, Sta. Mesa, Manila, the mild
steel plates which the latter ordered. As part
payment thereof, Albenson was given Pacific
Banking Corporation Check No. 136361 in the
amount of P2,575.00 and drawn against the
account of E.L. Woodworks (Rollo, p. 148).
When presented for payment, the check was
dishonored for the reason "Account Closed."
Thereafter, petitioner Albenson, through counsel,
traced the origin of the dishonored check. From the
records of the Securities and Exchange
Commission (SEC), Albenson discovered that the
president of Guaranteed, the recipient of the
unpaid mild steel plates, was one "Eugenio S.
Baltao." Upon further inquiry, Albenson was
informed by the Ministry of Trade and Industry that
E.L. Woodworks, a single proprietorship business,
was registered in the name of one "Eugenio
Baltao". In addition, upon verification with the
drawee bank, Pacific Banking Corporation,
Albenson was advised that the signature
appearing on the subject check belonged to one
"Eugenio Baltao."
After obtaining the foregoing information,
Albenson, through counsel, made an extrajudicial
demand upon private respondent Eugenio S.
Baltao, president of Guaranteed, to replace and/or
make good the dishonored check.
76
Respondent Baltao, through counsel, denied that
he issued the check, or that the signature
appearing thereon is his. He further alleged that
Guaranteed was a defunct entity and hence, could
not have transacted business with Albenson.
On February 14, 1983, Albenson filed with the
Office of the Provincial Fiscal of Rizal a complaint
against Eugenio S. Baltao for violation of Batas
Pambansa Bilang 22. Submitted to support said
charges was an affidavit of petitioner Benjamin
Mendiona, an employee of Albenson. In said
affidavit, the above-mentioned circumstances
were stated.
It appears, however, that private respondent has a
namesake, his son Eugenio Baltao III, who
manages a business establishment, E.L.
Woodworks, on the ground floor of the Baltao
Building, 3267 V. Mapa Street, Sta. Mesa, Manila,
the very same business address of Guaranteed.
On September 5, 1983, Assistant Fiscal Ricardo
Sumaway filed an information against Eugenio S.
Baltao for Violation of Batas Pambansa Bilang 22.
In filing said information, Fiscal Sumaway claimed
that he had given Eugenio S. Baltao opportunity to
submit controverting evidence, but the latter failed
to do so and therefore, was deemed to have
waived his right.
Respondent Baltao, claiming ignorance of the
complaint against him, immediately filed with the
Provincial Fiscal of Rizal a motion for
reinvestigation, alleging that it was not true that he
had been given an opportunity to be heard in the
preliminary investigation conducted by Fiscal
Sumaway, and that he never had any dealings with
Albenson or Benjamin Mendiona, consequently,
the check for which he has been accused of having
issued without funds was not issued by him and
the signature in said check was not his.
On January 30, 1984, Provincial Fiscal Mauro M.
Castro of Rizal reversed the finding of Fiscal
Sumaway and exonerated respondent Baltao. He
also instructed the Trial Fiscal to move for
dismissal of the information filed against Eugenio
S. Baltao. Fiscal Castro found that the signature in
PBC Check No. 136361 is not the signature of
Eugenio S. Baltao. He also found that there is no
showing in the records of the preliminary
investigation that Eugenio S. Baltao actually
received notice of the said investigation. Fiscal
Castro then castigated Fiscal Sumaway for failing
to exercise care and prudence in the performance
of his duties, thereby causing injustice to
respondent who was not properly notified of the
complaint against him and of the requirement to
submit his counter evidence.
Because of the alleged unjust filing of a criminal
case against him for allegedly issuing a check
which bounced in violation of Batas Pambansa
Bilang 22 for a measly amount of P2,575.00,
respondent Baltao filed before the Regional Trial
Court of Quezon City a complaint for damages
against herein petitioners Albenson Enterprises,
Jesse Yap, its owner, and Benjamin Mendiona, its
employee.
In its decision, the lower court observed that "the
check is drawn against the account of "E.L.
Woodworks," not of Guaranteed Industries of
which plaintiff used to be President. Guaranteed
Industries had been inactive and had ceased to
exist as a corporation since 1975. . . . . The
possibility is that it was with Gene Baltao or
Eugenio Baltao III, a son of plaintiff who had a
business on the ground floor of Baltao Building
located on V. Mapa Street that the defendants may
have been dealing with . . . ." (Rollo, pp. 41-42).
The dispositive portion of the trial court 's decision
reads:
WHEREFORE, judgment is hereby
rendered in favor of plaintiff and against
defendants ordering the latter to pay
plaintiff jointly and severally:
1. actual or compensatory damages of
P133,350.00;
2. moral damages of P1,000,000.00 (1
million pesos);
3. exemplary damages of P200,000.00;
4. attorney's fees of P100,000.00;
5 costs.
Defendants' counterclaim against plaintiff
and claim for damages against Mercantile
Insurance Co. on the bond for the issuance
of the writ of attachment at the instance of
plaintiff are hereby dismissed for lack of
merit. (Rollo, pp. 38-39).
On appeal, respondent court modified the trial
court's decision as follows:
WHEREFORE, the decision appealed from
is MODIFIED by reducing the moral
77
 damages awarded therein from
P1,000,000.00 to P500,000.00 and the
attorney's fees from P100,000.00 to
P50,000.00, said decision being hereby
affirmed in all its other aspects. With costs
against appellants. (Rollo, pp. 50-51)
Dissatisfied with the above ruling, petitioners
Albenson Enterprises Corp., Jesse Yap, and
Benjamin Mendiona filed the instant Petition,
alleging that the appellate court erred in:
1. Concluding that private respondent's
cause of action is not one based on
malicious prosecution but one for abuse of
rights under Article 21 of the Civil Code
notwithstanding the fact that the basis of a
civil action for malicious prosecution is
Article 2219 in relation to Article 21 or
Article 2176 of the Civil Code . . . .
2. Concluding that "hitting at and in effect
maligning (private respondent) with an
unjust criminal case was, without more, a
plain case of abuse of rights by
misdirection" and "was therefore,
actionable by itself," and which "became
inordinately blatant and grossly
aggravated when . . . (private respondent)
was deprived of his basic right to notice
and a fair hearing in the so-called
preliminary investigation . . . . "
3. Concluding that petitioner's "actuations
in this case were coldly deliberate and
calculated", no evidence having been
adduced to support such a sweeping
statement.
4. Holding the petitioner corporation,
petitioner Yap and petitioner Mendiona
jointly and severally liable without
sufficient basis in law and in fact.
5. Awarding respondents —
5.1. P133,350.00 as actual or
compensatory damages, even in the
absence of sufficient evidence to show
that such was actually suffered.
5.2. P500,000.00 as moral damages
considering that the evidence in this
connection merely involved private
respondent's alleged celebrated status
as a businessman, there being no
showing that the act complained of
adversely affected private
respondent's reputation or that it
resulted to material loss.
5.3. P200,000.00 as exemplary
damages despite the fact that
petitioners were duly advised by
counsel of their legal recourse.
5.4. P50,000.00 as attorney's fees, no
evidence having been adduced to
justify such an award (Rollo, pp. 4-6).
Petitioners contend that the civil case filed in the
lower court was one for malicious prosecution.
Citing the case of Madera vs. Lopez (102 SCRA
700 [1981]), they assert that the absence of malice
on their part absolves them from any liability for
malicious prosecution. Private respondent, on the
other hand, anchored his complaint for Damages
on Articles 19, 20, and 21 ** of the Civil Code.
Article 19, known to contain what is commonly
referred to as the principle of abuse of rights, sets
certain standards which may be observed not only
in the exercise of one's rights but also in the
performance of one's duties. These standards are
the following: to act with justice; to give everyone
his due; and to observe honesty and good faith.
The law, therefore, recognizes the primordial
limitation on all rights: that in their exercise, the
norms of human conduct set forth in Article 19
must be observed. A right, though by itself legal
because recognized or granted by law as such,
may nevertheless become the source of some
illegality. When a right is exercised in a manner
which does not conform with the norms enshrined
in Article 19 and results in damage to another, a
legal wrong is thereby committed for which the
wrongdoer must be held responsible. Although the
requirements of each provision is different, these
three (3) articles are all related to each other. As
the eminent Civilist Senator Arturo Tolentino puts
it: "With this article (Article 21), combined with
articles 19 and 20, the scope of our law on civil
wrongs has been very greatly broadened; it has
become much more supple and adaptable than
the Anglo-American law on torts. It is now difficult
to conceive of any malevolent exercise of a right
which could not be checked by the application of
these articles" (Tolentino, 1 Civil Code of the
Philippines 72).
There is however, no hard and fast rule which can
be applied to determine whether or not the
principle of abuse of rights may be invoked. The
question of whether or not the principle of abuse of
rights has been violated, resulting in damages
under Articles 20 and 21 or other applicable
78
provision of law, depends on the circumstances of
each case. (Globe Mackay Cable and Radio
Corporation vs. Court of Appeals, 176 SCRA 778
[1989]).
The elements of an abuse of right under Article 19
are the following: (1) There is a legal right or duty;
(2) which is exercised in bad faith; (3) for the
sole intent of prejudicing or injuring another.
Article 20 speaks of the general sanction for all
other provisions of law which do not especially
provide for their own sanction (Tolentino, supra, p.
71). Thus, anyone who,
whether willfully or negligently, in the exercise of
his legal right or duty, causes damage to another,
shall indemnify his victim for injuries suffered
thereby. Article 21 deals with acts contra bonus
mores, and has the following elements: 1) There is
an act which is legal; 2) but which is contrary to
morals, good custom, public order, or public policy;
3) and it is done with intent to injure.
Thus, under any of these three (3) provisions of
law, an act which causes injury to another may be
made the basis for an award of damages.
There is a common element under Articles 19 and
21, and that is, the act must be intentional.
However, Article 20 does not distinguish: the act
may be done either "willfully", or "negligently". The
trial court as well as the respondent appellate court
mistakenly lumped these three (3) articles
together, and cited the same as the bases for the
award of damages in the civil complaint filed
against petitioners, thus:
With the foregoing legal provisions
(Articles 19, 20, and 21) in focus, there is
not much difficulty in ascertaining the
means by which appellants' first assigned
error should be resolved, given the
admitted fact that when there was an
attempt to collect the amount of
P2,575.00, the defendants were explicitly
warned that plaintiff Eugenio S. Baltao is
not the Eugenio Baltao defendants had
been dealing with (supra, p. 5). When the
defendants nevertheless insisted and
persisted in filing a case — a criminal case
no less — against plaintiff, said defendants
ran afoul of the legal provisions (Articles
19, 20, and 21 of the Civil Code) cited by
the lower court and heretofore quoted
(supra).
Defendants, not having been paid the
amount of P2,575.00, certainly had the
right to complain. But that right is limited by
certain constraints. Beyond that limit is the
area of excess, of abuse of rights. (Rollo,
pp.
44-45).
Assuming, arguendo, that all the three (3) articles,
together and not independently of each one, could
be validly made the bases for an award of
damages based on the principle of "abuse of right",
under the circumstances, We see no cogent
reason for such an award of damages to be made
in favor of private respondent.
Certainly, petitioners could not be said to have
violated the aforestated principle of abuse of right.
What prompted petitioners to file the case for
violation of Batas Pambansa Bilang 22 against
private respondent was their failure to collect the
amount of P2,575.00 due on a bounced check
which they honestly believed was issued to them
by private respondent. Petitioners had conducted
inquiries regarding the origin of the check, and
yielded the following results: from the records of
the Securities and Exchange Commission, it was
discovered that the President of Guaranteed (the
recipient of the unpaid mild steel plates), was one
"Eugenio S. Baltao"; an inquiry with the Ministry of
Trade and Industry revealed that E.L. Woodworks,
against whose account the check was drawn, was
registered in the name of one "Eugenio Baltao";
verification with the drawee bank, the Pacific
Banking Corporation, revealed that the signature
appearing on the check belonged to one "Eugenio
Baltao".
In a letter dated December 16, 1983, counsel for
petitioners wrote private respondent demanding
that he make good the amount of the check.
Counsel for private respondent wrote back and
denied, among others, that private respondent
ever transacted business with Albenson
Enterprises Corporation; that he ever issued the
check in question. Private respondent's counsel
even went further: he made a warning to
defendants to check the veracity of their claim. It is
pivotal to note at this juncture that in this same
letter, if indeed private respondent wanted to clear
himself from the baseless accusation made
against his person, he should have made mention
of the fact that there are three (3) persons with the
same name, i.e.: Eugenio Baltao, Sr., Eugenio S.
Baltao, Jr. (private respondent), and Eugenio
Baltao III (private respondent's son, who as it
turned out later, was the issuer of the check). He,
however, failed to do this. The last two Baltaos
were doing business in the same building —
Baltao Building — located at 3267 V. Mapa Street,
Sta. Mesa, Manila. The mild steel plates were
ordered in the name of Guaranteed of which
79
respondent Eugenio S. Baltao is the president and
delivered to Guaranteed at Baltao building. Thus,
petitioners had every reason to believe that the
Eugenio Baltao who issued the bouncing check is
respondent Eugenio S. Baltao when their counsel
wrote respondent to make good the amount of the
check and upon refusal, filed the complaint for
violation of BP Blg. 22.
Private respondent, however, did nothing to clarify
the case of mistaken identity at first hand. Instead,
private respondent waited in ambush and
thereafter pounced on the hapless petitioners at a
time he thought was propitious by filing an action
for damages. The Court will not countenance this
devious scheme.
The criminal complaint filed against private
respondent after the latter refused to make good
the amount of the bouncing check despite demand
was a sincere attempt on the part of petitioners to
find the best possible means by which they could
collect the sum of money due them. A person who
has not been paid an obligation owed to him will
naturally seek ways to compel the debtor to pay
him. It was normal for petitioners to find means to
make the issuer of the check pay the amount
thereof. In the absence of a wrongful act or
omission or of fraud or bad faith, moral damages
cannot be awarded and that the adverse result of
an action does not per se make the action
wrongful and subject the actor to the payment of
damages, for the law could not have meant to
impose a penalty on the right to litigate (Rubio vs.
Court of Appeals, 141 SCRA 488 [1986]).
In the case at bar, private respondent does not
deny that the mild steel plates were ordered by and
delivered to Guaranteed at Baltao building and as
part payment thereof, the bouncing check was
issued by one Eugenio Baltao. Neither had private
respondent conveyed to petitioner that there are
two Eugenio Baltaos conducting business in the
same building — he and his son Eugenio Baltao
III. Considering that Guaranteed, which received
the goods in payment of which the bouncing check
was issued is owned by respondent, petitioner
acted in good faith and probable cause in filing the
complaint before the provincial fiscal.
To constitute malicious prosecution, there must be
proof that the prosecution was prompted by a
sinister design to vex and humiliate a person, and
that it was initiated deliberately by the defendant
knowing that his charges were false and
groundless. Concededly, the mere act of
submitting a case to the authorities for prosecution
does not make one liable for malicious
prosecution. (Manila Gas Corporation vs. Court of
Appeals, 100 SCRA 602 [1980]). Still, private
respondent argues that liability under Articles 19,
20, and 21 of the Civil Code is so encompassing
that it likewise includes liability for damages for
malicious prosecution under Article 2219 (8). True,
a civil action for damages for malicious
prosecution is allowed under the New Civil Code,
more specifically Articles 19, 20, 26, 29, 32, 33, 35,
and 2219 (8) thereof. In order that such a case can
prosper, however, the following three (3) elements
must be present, to wit: (1) The fact of the
prosecution and the further fact that the defendant
was himself the prosecutor, and that the action
was finally terminated with an acquittal; (2) That in
bringing the action, the prosecutor acted without
probable cause; (3) The prosecutor was actuated
or impelled by legal malice (Lao vs. Court of
Appeals, 199 SCRA 58, [1991]).
Thus, a party injured by the filing of a court case
against him, even if he is later on absolved, may
file a case for damages grounded either on the
principle of abuse of rights, or on malicious
prosecution. As earlier stated, a complaint for
damages based on malicious prosecution will
prosper only if the three (3) elements aforecited
are shown to exist. In the case at bar, the second
and third elements were not shown to exist. It is
well-settled that one cannot be held liable for
maliciously instituting a prosecution where one
has acted with probable cause. "Probable cause is
the existence of such facts and circumstances as
would excite the belief, in a reasonable mind,
acting on the facts within the knowledge of the
prosecutor, that the person charged was guilty of
the crime for which he was prosecuted. In other
words, a suit will lie only in cases where a legal
prosecution has been carried on without probable
cause. The reason for this rule is that it would be a
very great discouragement to public justice, if
prosecutors, who had tolerable ground of
suspicion, were liable to be sued at law when their
indictment miscarried" (Que vs. Intermediate
Appellate Court, 169 SCRA 137 [1989]).
The presence of probable cause signifies, as a
legal consequence, the absence of malice. In the
instant case, it is evident that petitioners were not
motivated by malicious intent or by sinister design
to unduly harass private respondent, but only by a
well-founded anxiety to protect their rights when
they filed the criminal complaint against private
respondent.
To constitute malicious prosecution, there
must be proof that the prosecution was
prompted by a sinister design to vex and
humiliate a person, that it was initiated
80
 deliberately by the defendant knowing that
his charges were false and groundless.
Concededly, the mere act of submitting a
case to the authorities for prosecution
does not make one liable for malicious
prosecution. Proof and motive that the
institution of the action was prompted by a
sinister design to vex and humiliate a
person must be clearly and preponderantly
established to entitle the victims to
damages (Ibid.).
In the case at bar, there is no proof of a sinister
design on the part of petitioners to vex or humiliate
private respondent by instituting the criminal case
against him. While petitioners may have been
negligent to some extent in determining the liability
of private respondent for the dishonored check,
the same is not so gross or reckless as to amount
to bad faith warranting an award of damages.
The root of the controversy in this case is founded
on a case of mistaken identity. It is possible that
with a more assiduous investigation, petitioners
would have eventually discovered that private
respondent Eugenio S. Baltao is not the "Eugenio
Baltao" responsible for the dishonored check.
However, the record shows that petitioners did
exert considerable effort in order to determine the
liability of private respondent. Their investigation
pointed to private respondent as the "Eugenio
Baltao" who issued and signed the dishonored
check as the president of the debtor-corporation
Guaranteed Enterprises. Their error in proceeding
against the wrong individual was obviously in the
nature of an innocent mistake, and cannot be
characterized as having been committed in bad
faith. This error could have been discovered if
respondent had submitted his counter-affidavit
before investigating fiscal Sumaway and was
immediately rectified by Provincial Fiscal Mauro
Castro upon discovery thereof, i.e., during the
reinvestigation resulting in the dismissal of the
complaint.
Furthermore, the adverse result of an action does
not per se make the act wrongful and subject the
actor to the payment of moral damages. The law
could not have meant to impose a penalty on the
right to litigate, such right is so precious that moral
damages may not be charged on those who may
even exercise it erroneously. And an adverse
decision does not ipso facto justify the award of
attorney's fees to the winning party (Garcia vs.
Gonzales, 183 SCRA 72 [1990]).
Thus, an award of damages and attorney's fees is
unwarranted where the action was filed in good
faith. If damage results from a person's exercising
his legal rights, it is damnum absque injuria (Ilocos
Norte Electric Company vs. Court of Appeals, 179
SCRA 5 [1989]).
Coming now to the claim of private respondent for
actual or compensatory damages, the records
show that the same was based solely on his
allegations without proof to substantiate the same.
He did not present proof of the cost of the medical
treatment which he claimed to have undergone as
a result of the nervous breakdown he suffered, nor
did he present proof of the actual loss to his
business caused by the unjust litigation against
him. In determining actual damages, the court
cannot rely on speculation, conjectures or
guesswork as to the amount. Without the actual
proof of loss, the award of actual damages
becomes erroneous (Guilatco vs. City of Dagupan,
171 SCRA 382 [1989]).
Actual and compensatory damages are those
recoverable because of pecuniary loss — in
business, trade, property, profession, job or
occupation — and the same must be proved,
otherwise, if the proof is flimsy and
unsubstantiated, no damages will be given (Rubio
vs. Court of Appeals, 141 SCRA 488 [1986]). For
these reasons, it was gravely erroneous for
respondent court to have affirmed the award of
actual damages in favor of private respondent in
the absence of proof thereof.
Where there is no evidence of the other party
having acted in wanton, fraudulent or reckless, or
oppressive manner, neither may exemplary
damages be awarded (Dee Hua Liong Electrical
Equipment Corporation vs. Reyes, 145 SCRA 488
[1986]).
As to the award of attorney's fees, it is well-settled
that the same is the exception rather than the
general rule. Needless to say, the award of
attorney's fees must be disallowed where the
award of exemplary damages is eliminated (Article
2208, Civil Code; Agustin vs. Court of Appeals,
186 SCRA 375 [1990]). Moreover, in view of the
fact that there was no malicious prosecution
against private respondent, attorney's fees cannot
be awarded him on that ground.
In the final analysis, there is no proof or showing
that petitioners acted maliciously or in bad faith in
the filing of the case against private respondent.
Consequently, in the absence of proof of fraud and
bad faith committed by petitioners, they cannot be
held liable for damages (Escritor, Jr. vs.
Intermediate Appellate Court, 155 SCRA 577
81
[1987]). No damages can be awarded in the
instant case, whether based on the principle of
abuse of rights, or for malicious prosecution. The
questioned judgment in the instant case attests to
the propensity of trial judges to award damages
without basis. Lower courts are hereby cautioned
anew against awarding unconscionable sums as
damages without bases therefor.
WHEREFORE, the petition is GRANTED and the
decision of the Court of Appeals in C.A. G.R. C.V.
No. 14948 dated May 13, 1989, is hereby
REVERSED and SET ASIDE. Costs against
respondent Baltao.
SO ORDERED.
Gutierrez, Jr., Davide, Jr., Romero and Melo, JJ.,
concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-8883 July 14, 1959
ALFREDO M. VELAYO, ETC., plaintiff,
vs.
SHELL COMPANY OF THE PHILIPPINES
ISLANDS, LTD., defendant-appellee.
ALFONSO Z. SYCIP, ET. AL., intervenors-
appellants.
Sycip, Quisumbing, Salazar and Associates for
appellants.
Ozaeta, Lichauco and Picazo for appellee.
BAUTISTA ANGELO, J.:
On December 17, 1948, Alfredo M. Velayo as
assignees of the insolvent Commercial Airlines,
Inc., instituted an action against Shell Company of
the Philippine Islands, Ltd., in the Court of First
Instance of Manila for injunction and damages
(Civil Case No. 6966). On October 26, 1951, a
complaint in intervention was filed by Alfonso
Sycip, Paul Sycip, and Yek Trading Corporation,
and on November 14, 1951, by Mabasa &
Company.
After trial wherein plaintiff presented evidence in
his behalf, but none in behalf of intervenors, the
court rendered decision dismissing plaintiff's
complaint as well as those filed by the intervenors.
On March 31, 1954, counsel for plaintiff filed a
notice of appeal, appeal bond, and record on
appeal in behalf only of plaintiff even if they also
represent the intervenors, which in due time were
approved, the Court instructing its clerk to forward
the record on appeal to the Supreme Court
together with all the evidence presented in the
case. This instruction was actually complied with.
On August 31, 1954, the Deputy Clerk of the
Supreme Court notified counsel of plaintiff that the
record as well as the evidence have already been
received and that they should file their brief within
45 days from receipt of the notice. On November
2, 1954, counsel filed their brief for appellants. On
November 6, 1954, or 7 months after the judgment
had become final as against the intervenors, and
4 days after counsel for appellants had submitted
the latter's brief, counsel for intervenors filed with
the Supreme Court a petition for correction of the
record on appeal in order to enable them to insert
therein the names of the intervenors as appellants,
the petition being based, among others, on the
ground that the omission of the names of the
intervenors in said record on appeal was due to
the mistake of the typist who prepared it while the
attorney in charge was on vacation. The petition
was vigorously opposed by counsel for defendant,
contending that the same would serve no purpose,
whatsoever considering that the intervenors had
not presented any evidence in support of their
claim, aside from the fact that the alleged absence
of the attorney of the intervenors cannot constitute
a justification for the alleged omission of the
intervenors as appellants. On November 12, 1954,
the Court denied the petition. Counsel intervenors
moved for a reconsideration of the order, but the
same was denied.
On November 19, 1954, counsel for intervenors
filed with the lower court a petition for relief under
Rule 38 of the Rules of Court, wherein he
reiterated the same grounds they alleged in the
petition for correction filed by them in the Supreme
Court, which petition was denied on November 27,
1954, for having been filed outside the
reglementary period fixed in said Rule 38. Counsel
filed a motion for reconsideration, which was again
denied, the Court stating that "no judgment or
order has been rendered, nor any other
proceeding taken by this Court on the right of the
intervenors to appeal."
On December 20, 1954, counsel filed once more a
motion to amend the record on appeal based on
grounds identical with those alleged in the petition
for correction filed before the Supreme Court. On
December 27, 1954, the lower court denied the
motion. On January 6, 1955, counsel filed a
82
petition for relief from this last order entered on
December 27, 1954, to which counsel for
defendant filed an opposition. On February 5,
1955, hearing was had on both the petition for
relief and the opposition, and on February 9, 1955,
the petition was denied on the ground that the case
is already before the Supreme Court on appeal. It
is from this order that the counsel for intervenors
has taken the appeal now before us.
The instant appeal has no merit.
To begin with, the only remedy which appellants
now seek in this appeal is the inclusion of the
intervenors as appellants in the appeal from the
decision rendered in the main case, but this
remedy has already been denied twice by this
Court, first, in its resolution of November 12, 1954
denying their petition for correction of the record
on appeal, and, second, in denying their motion for
reconsideration of said resolution. It should be
noted that the grounds relied upon in this appeal
are the same grounds alleged in said petition for
correction.
In the second place, the intervenors have no right
or reason to appeal from the decision in the main
case, it appearing that they did not introduce any
evidence during the trial in support of their
complaint, which shows that their appeal would be
merely pro-forma. And, in any event, they made
the attempt to amend the record on appeal seven
(7) months after the decision had become final
against them.
In the third place, the intervenors have no right or
reason to file a petition for relief under Rule 38 of
the Rules of Court from the order of the lower court
issued on December 27, 1954, for the reason that
the same was entered upon a motion filed by them.
Indeed they cannot reasonably assert that the
order was entered against them through fraud,
accident, mistake, or negligence. The fraud
mentioned in Rule 38 is the fraud committed by the
adverse party and certainly the same cannot be
attributed to the Court.
Finally, it appears that the main case has already
been decided by this Court on the merits on
October 31, 1956, reversing the decision of the
lower court and awarding damages to plaintiff,
which apparently is the very purpose which the
intervenors seek to accomplish in joining the
appeal as co-appellants. This appeal, therefore,
has already become moot.
Wherefore, the order appealed from is affirmed,
with costs against appellants.
Paras, C.J., Bengzon, Padilla, Montemayor,
Labrador, Concepcion, Endencia and Barrera,
JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-19671 November 29, 1965
PASTOR B. TENCHAVEZ, plaintiff-appellant,
vs.
VICENTA F. ESCAÑO, ET AL., defendants-
appellees.
I. V. Binamira & F. B. Barria for plaintiff-appellant.
Jalandoni & Jarnir for defendants-appellees.
REYES, J.B.L., J.:
Direct appeal, on factual and legal questions, from
the judgment of the Court of First Instance of
Cebu, in its Civil Case No. R-4177, denying the
claim of the plaintiff-appellant, Pastor B.
Tenchavez, for legal separation and one million
pesos in damages against his wife and parents-in-
law, the defendants-appellees, Vicente, Mamerto
and Mena,1 all surnamed "Escaño," respectively.2
The facts, supported by the evidence of record, are
the following:
Missing her late afternoon classes on 24 February
1948 in the University of San Carlos, Cebu City,
where she was then enrolled as a second year
student of commerce, Vicenta Escaño, 27 years of
age (scion of a well-to-do and socially prominent
Filipino family of Spanish ancestry and a
"sheltered colegiala"), exchanged marriage vows
with Pastor Tenchavez, 32 years of age, an
engineer, ex-army officer and of undistinguished
stock, without the knowledge of her parents,
before a Catholic chaplain, Lt. Moises Lavares, in
the house of one Juan Alburo in the said city. The
marriage was the culmination of a previous love
affair and was duly registered with the local civil
register.
Vicenta's letters to Pastor, and his to her, before
the marriage, indicate that the couple were deeply
in love. Together with a friend, Pacita Noel, their
matchmaker and go-between, they had planned
83
out their marital future whereby Pacita would be
the governess of their first-born; they started
saving money in a piggy bank. A few weeks before
their secret marriage, their engagement was
broken; Vicenta returned the engagement ring and
accepted another suitor, Joseling Lao. Her love for
Pastor beckoned; she pleaded for his return, and
they reconciled. This time they planned to get
married and then elope. To facilitate the
elopement, Vicenta had brought some of her
clothes to the room of Pacita Noel in St. Mary's
Hall, which was their usual trysting place.
Although planned for the midnight following their
marriage, the elopement did not, however,
materialize because when Vicenta went back to
her classes after the marriage, her mother, who
got wind of the intended nuptials, was already
waiting for her at the college. Vicenta was taken
home where she admitted that she had already
married Pastor. Mamerto and Mena Escaño were
surprised, because Pastor never asked for the
hand of Vicenta, and were disgusted because of
the great scandal that the clandestine marriage
would provoke (t.s.n., vol. III, pp. 1105-06). The
following morning, the Escaño spouses sought
priestly advice. Father Reynes suggested a
recelebration to validate what he believed to be an
invalid marriage, from the standpoint of the
Church, due to the lack of authority from the
Archbishop or the parish priest for the officiating
chaplain to celebrate the marriage. The
recelebration did not take place, because on 26
February 1948 Mamerto Escaño was handed by a
maid, whose name he claims he does not
remember, a letter purportedly coming from San
Carlos college students and disclosing an
amorous relationship between Pastor Tenchavez
and Pacita Noel; Vicenta translated the letter to her
father, and thereafter would not agree to a new
marriage. Vicenta and Pastor met that day in the
house of Mrs. Pilar Mendezona. Thereafter,
Vicenta continued living with her parents while
Pastor returned to his job in Manila. Her letter of
22 March 1948 (Exh. "M"), while still solicitous of
her husband's welfare, was not as endearing as
her previous letters when their love was aflame.
Vicenta was bred in Catholic ways but is of a
changeable disposition, and Pastor knew it. She
fondly accepted her being called a "jellyfish." She
was not prevented by her parents from
communicating with Pastor (Exh. "1-Escaño"), but
her letters became less frequent as the days
passed. As of June, 1948 the newlyweds were
already estranged (Exh. "2-Escaño"). Vicenta had
gone to Jimenez, Misamis Occidental, to escape
from the scandal that her marriage stirred in Cebu
society. There, a lawyer filed for her a petition,
drafted by then Senator Emmanuel Pelaez, to
annul her marriage. She did not sign the petition
(Exh. "B-5"). The case was dismissed without
prejudice because of her non-appearance at the
hearing (Exh. "B-4").
On 24 June 1950, without informing her husband,
she applied for a passport, indicating in her
application that she was single, that her purpose
was to study, and she was domiciled in Cebu City,
and that she intended to return after two years.
The application was approved, and she left for the
United States. On 22 August 1950, she filed a
verified complaint for divorce against the herein
plaintiff in the Second Judicial District Court of the
State of Nevada in and for the County of Washoe,
on the ground of "extreme cruelty, entirely mental
in character." On 21 October 1950, a decree of
divorce, "final and absolute", was issued in open
court by the said tribunal.
In 1951 Mamerto and Mena Escaño filed a petition
with the Archbishop of Cebu to annul their
daughter's marriage to Pastor (Exh. "D"). On 10
September 1954, Vicenta sought papal
dispensation of her marriage (Exh. "D"-2).
On 13 September 1954, Vicenta married an
American, Russell Leo Moran, in Nevada. She
now lives with him in California, and, by him, has
begotten children. She acquired American
citizenship on 8 August 1958.
But on 30 July 1955, Tenchavez had initiated the
proceedings at bar by a complaint in the Court of
First Instance of Cebu, and amended on 31 May
1956, against Vicenta F. Escaño, her parents,
Mamerto and Mena Escaño, whom he charged
with having dissuaded and discouraged Vicenta
from joining her husband, and alienating her
affections, and against the Roman Catholic
Church, for having, through its Diocesan Tribunal,
decreed the annulment of the marriage, and asked
for legal separation and one million pesos in
damages. Vicenta claimed a valid divorce from
plaintiff and an equally valid marriage to her
present husband, Russell Leo Moran; while her
parents denied that they had in any way influenced
their daughter's acts, and counterclaimed for moral
damages.
The appealed judgment did not decree a legal
separation, but freed the plaintiff from supporting
his wife and to acquire property to the exclusion of
his wife. It allowed the counterclaim of Mamerto
Escaño and Mena Escaño for moral and
exemplary damages and attorney's fees against
84
the plaintiff-appellant, to the extent of P45,000.00,
and plaintiff resorted directly to this Court.
The appellant ascribes, as errors of the trial court,
the following:
1. In not declaring legal separation; in not
holding defendant Vicenta F. Escaño liable
for damages and in dismissing the
complaint;.
2. In not holding the defendant parents
Mamerto Escano and the heirs of Doña
Mena Escaño liable for damages;.
3 In holding the plaintiff liable for and
requiring him to pay the damages to the
defendant parents on their counterclaims;
and.
4. In dismissing the complaint and in
denying the relief sought by the plaintiff.
That on 24 February 1948 the plaintiff-appellant,
Pastor Tenchavez, and the defendant-appellee,
Vicenta Escaño, were validly married to each
other, from the standpoint of our civil law, is clearly
established by the record before us. Both parties
were then above the age of majority, and
otherwise qualified; and both consented to the
marriage, which was performed by a Catholic
priest (army chaplain Lavares) in the presence of
competent witnesses. It is nowhere shown that
said priest was not duly authorized under civil law
to solemnize marriages.
The chaplain's alleged lack of ecclesiastical
authorization from the parish priest and the
Ordinary, as required by Canon law, is irrelevant in
our civil law, not only because of the separation of
Church and State but also because Act 3613 of the
Philippine Legislature (which was the marriage law
in force at the time) expressly provided that —
SEC. 1. Essential requisites. Essential
requisites for marriage are the legal
capacity of the contracting parties and
consent. (Emphasis supplied)
The actual authority of the solemnizing officer was
thus only a formal requirement, and, therefore, not
essential to give the marriage civil effects,3 and
this is emphasized by section 27 of said marriage
act, which provided the following:
SEC. 27. Failure to comply with formal
requirements. No marriage shall be
declared invalid because of the absence of
one or several of the formal requirements
of this Act if, when it was performed, the
spouses or one of them believed in good
faith that the person who solemnized the
marriage was actually empowered to do
so, and that the marriage was perfectly
legal.
The good faith of all the parties to the marriage
(and hence the validity of their marriage) will be
presumed until the contrary is positively proved
(Lao vs. Dee Tim, 45 Phil. 739, 745; Francisco vs.
Jason, 60 Phil. 442, 448). It is well to note here that
in the case at bar, doubts as to the authority of the
solemnizing priest arose only after the marriage,
when Vicenta's parents consulted Father Reynes
and the archbishop of Cebu. Moreover, the very
act of Vicenta in abandoning her original action for
annulment and subsequently suing for divorce
implies an admission that her marriage to plaintiff
was valid and binding.
Defendant Vicenta Escaño argues that when she
contracted the marriage she was under the undue
influence of Pacita Noel, whom she charges to
have been in conspiracy with appellant
Tenchavez. Even granting, for argument's sake,
the truth of that contention, and assuming that
Vicenta's consent was vitiated by fraud and undue
influence, such vices did not render her
marriage ab initio void, but merely voidable, and
the marriage remained valid until annulled by a
competent civil court. This was never done, and
admittedly, Vicenta's suit for annulment in the
Court of First Instance of Misamis was dismissed
for non-prosecution.
It is equally clear from the record that the valid
marriage between Pastor Tenchavez and Vicenta
Escaño remained subsisting and undissolved
under Philippine law, notwithstanding the decree
of absolute divorce that the wife sought and
obtained on 21 October 1950 from the Second
Judicial District Court of Washoe County, State of
Nevada, on grounds of "extreme cruelty, entirely
mental in character." At the time the divorce
decree was issued, Vicenta Escaño, like her
husband, was still a Filipino citizen.4 She was then
subject to Philippine law, and Article 15 of the Civil
Code of the Philippines (Rep. Act No. 386),
already in force at the time, expressly provided:
Laws relating to family rights and duties or
to the status, condition and legal capacity
of persons are binding upon the citizens of
the Philippines, even though living abroad.
85
The Civil Code of the Philippines, now in force,
does not admit absolute divorce, quo ad vinculo
matrimonii; and in fact does not even use that
term, to further emphasize its restrictive policy on
the matter, in contrast to the preceding legislation
that admitted absolute divorce on grounds of
adultery of the wife or concubinage of the husband
(Act 2710). Instead of divorce, the present Civil
Code only provides for legal separation (Title IV,
Book 1, Arts. 97 to 108), and, even in that case, it
expressly prescribes that "the marriage bonds
shall not be severed" (Art. 106, subpar. 1).
For the Philippine courts to recognize and give
recognition or effect to a foreign decree of absolute
divorce betiveen Filipino citizens could be a patent
violation of the declared public policy of the state,
specially in view of the third paragraph of Article 17
of the Civil Code that prescribes the following:
Prohibitive laws concerning persons, their
acts or property, and those which have for
their object public order, policy and good
customs, shall not be rendered ineffective
by laws or judgments promulgated, or by
determinations or conventions agreed
upon in a foreign country.
Even more, the grant of effectivity in this
jurisdiction to such foreign divorce decrees would,
in effect, give rise to an irritating and scandalous
discrimination in favor of wealthy citizens, to the
detriment of those members of our polity whose
means do not permit them to sojourn abroad and
obtain absolute divorces outside the Philippines.
From this point of view, it is irrelevant that
appellant Pastor Tenchavez should have
appeared in the Nevada divorce court. Primarily
because the policy of our law cannot be nullified
by acts of private parties (Civil Code,Art. 17, jam
quot.); and additionally, because the mere
appearance of a non-resident consort cannot
confer jurisdiction where the court originally had
none (Area vs. Javier, 95 Phil. 579).
From the preceding facts and considerations,
there flows as a necessary consequence that in
this jurisdiction Vicenta Escaño's divorce and
second marriage are not entitled to recognition as
valid; for her previous union to plaintiff Tenchavez
must be declared to be existent and undissolved.
It follows, likewise, that her refusal to perform her
wifely duties, and her denial of consortium and her
desertion of her husband constitute in law a wrong
caused through her fault, for which the husband is
entitled to the corresponding indemnity (Civil
Code, Art. 2176). Neither an unsubstantiated
charge of deceit nor an anonymous letter charging
immorality against the husband constitute,
contrary to her claim, adequate excuse.
Wherefore, her marriage and cohabitation with
Russell Leo Moran is technically "intercourse with
a person not her husband" from the standpoint of
Philippine Law, and entitles plaintiff-appellant
Tenchavez to a decree of "legal separation under
our law, on the basis of adultery" (Revised Penal
Code, Art. 333).
The foregoing conclusions as to the untoward
effect of a marriage after an invalid divorce are in
accord with the previous doctrines and rulings of
this court on the subject, particularly those that
were rendered under our laws prior to the approval
of the absolute divorce act (Act 2710 of the
Philippine Legislature). As a matter of legal history,
our statutes did not recognize divorces a
vinculo before 1917, when Act 2710 became
effective; and the present Civil Code of the
Philippines, in disregarding absolute divorces, in
effect merely reverted to the policies on the subject
prevailing before Act 2710. The rulings, therefore,
under the Civil Code of 1889, prior to the Act
above-mentioned, are now, fully applicable. Of
these, the decision in Ramirez vs. Gmur, 42 Phil.
855, is of particular interest. Said this Court in that
case:
As the divorce granted by the French Court
must be ignored, it results that the
marriage of Dr. Mory and Leona Castro,
celebrated in London in 1905, could not
legalize their relations; and the
circumstance that they afterwards passed
for husband and wife in Switzerland until
her death is wholly without legal
significance. The claims of the very
children to participate in the estate of
Samuel Bishop must therefore be rejected.
The right to inherit is limited to legitimate,
legitimated and acknowledged natural
children. The children of adulterous
relations are wholly excluded. The word
"descendants" as used in Article 941 of the
Civil Code cannot be interpreted to include
illegitimates born of adulterous relations.
(Emphasis supplied)
Except for the fact that the successional rights of
the children, begotten from Vicenta's marriage to
Leo Moran after the invalid divorce, are not
involved in the case at bar, the Gmur case is
authority for the proposition that such union is
adulterous in this jurisdiction, and, therefore,
justifies an action for legal separation on the part
of the innocent consort of the first marriage, that
86
stands undissolved in Philippine law. In not so
declaring, the trial court committed error.
True it is that our ruling gives rise to anomalous
situations where the status of a person (whether
divorced or not) would depend on the territory
where the question arises. Anomalies of this kind
are not new in the Philippines, and the answer to
them was given in Barretto vs. Gonzales, 58 Phil.
667:
The hardship of the existing divorce laws
in the Philippine Islands are well known to
the members of the Legislature. It is the
duty of the Courts to enforce the laws of
divorce as written by Legislature if they are
constitutional. Courts have no right to say
that such laws are too strict or too liberal.
(p. 72)
The appellant's first assignment of error is,
therefore, sustained.
However, the plaintiff-appellant's charge that his
wife's parents, Dr. Mamerto Escaño and his wife,
the late Doña Mena Escaño, alienated the
affections of their daughter and influenced her
conduct toward her husband are not supported by
credible evidence. The testimony of Pastor
Tenchavez about the Escaño's animosity toward
him strikes us to be merely conjecture and
exaggeration, and are belied by Pastor's own
letters written before this suit was begun (Exh. "2-
Escaño" and "Vicenta," Rec. on App., pp. 270-
274). In these letters he expressly apologized to
the defendants for "misjudging them" and for the
"great unhappiness" caused by his "impulsive
blunders" and "sinful pride," "effrontery and
audacity" [sic]. Plaintiff was admitted to the Escaño
house to visit and court Vicenta, and the record
shows nothing to prove that he would not have
been accepted to marry Vicenta had he openly
asked for her hand, as good manners and
breeding demanded. Even after learning of the
clandestine marriage, and despite their shock at
such unexpected event, the parents of Vicenta
proposed and arranged that the marriage be
recelebrated in strict conformity with the canons of
their religion upon advice that the previous one
was canonically defective. If no recelebration of
the marriage ceremony was had it was not due to
defendants Mamerto Escaño and his wife, but to
the refusal of Vicenta to proceed with it. That the
spouses Escaño did not seek to compel or induce
their daughter to assent to the recelebration but
respected her decision, or that they abided by her
resolve, does not constitute in law an alienation of
affections. Neither does the fact that Vicenta's
parents sent her money while she was in the
United States; for it was natural that they should
not wish their daughter to live in penury even if
they did not concur in her decision to divorce
Tenchavez (27 Am. Jur. 130-132).
There is no evidence that the parents of Vicenta,
out of improper motives, aided and abetted her
original suit for annulment, or her subsequent
divorce; she appears to have acted independently,
and being of age, she was entitled to judge what
was best for her and ask that her decisions be
respected. Her parents, in so doing, certainly
cannot be charged with alienation of affections in
the absence of malice or unworthy motives, which
have not been shown, good faith being always
presumed until the contrary is proved.
SEC. 529. Liability of Parents, Guardians
or Kin. — The law distinguishes between
the right of a parent to interest himself in
the marital affairs of his child and the
absence of rights in a stranger to
intermeddle in such affairs. However, such
distinction between the liability of parents
and that of strangers is only in regard to
what will justify interference. A parent is
liable for alienation of affections resulting
from his own malicious conduct, as where
he wrongfully entices his son or daughter
to leave his or her spouse, but he is not
liable unless he acts maliciously, without
justification and from unworthy motives.
He is not liable where he acts and advises
his child in good faith with respect to his
child's marital relations in the interest of his
child as he sees it, the marriage of his child
not terminating his right and liberty to
interest himself in, and be extremely
solicitous for, his child's welfare and
happiness, even where his conduct and
advice suggest or result in the separation
of the spouses or the obtaining of a divorce
or annulment, or where he acts under
mistake or misinformation, or where his
advice or interference are indiscreet or
unfortunate, although it has been held that
the parent is liable for consequences
resulting from recklessness. He may in
good faith take his child into his home and
afford him or her protection and support,
so long as he has not maliciously enticed
his child away, or does not maliciously
entice or cause him or her to stay away,
from his or her spouse. This rule has more
frequently been applied in the case of
advice given to a married daughter, but it
is equally applicable in the case of advice
given to a son.
87
Plaintiff Tenchavez, in falsely charging Vicenta's
aged parents with racial or social discrimination
and with having exerted efforts and pressured her
to seek annulment and divorce, unquestionably
caused them unrest and anxiety, entitling them to
recover damages. While this suit may not have
been impelled by actual malice, the charges were
certainly reckless in the face of the proven facts
and circumstances. Court actions are not
established for parties to give vent to their
prejudices or spleen.
In the assessment of the moral damages
recoverable by appellant Pastor Tenchavez from
defendant Vicenta Escaño, it is proper to take into
account, against his patently unreasonable claim
for a million pesos in damages, that (a) the
marriage was celebrated in secret, and its failure
was not characterized by publicity or undue
humiliation on appellant's part; (b) that the parties
never lived together; and (c) that there is evidence
that appellant had originally agreed to the
annulment of the marriage, although such a
promise was legally invalid, being against public
policy (cf. Art. 88, Civ. Code). While appellant is
unable to remarry under our law, this fact is a
consequence of the indissoluble character of the
union that appellant entered into voluntarily and
with open eyes rather than of her divorce and her
second marriage. All told, we are of the opinion
that appellant should recover P25,000 only by way
of moral damages and attorney's fees.
With regard to the P45,000 damages awarded to
the defendants, Dr. Mamerto Escaño and Mena
Escaño, by the court below, we opine that the
same are excessive. While the filing of this
unfounded suit must have wounded said
defendants' feelings and caused them anxiety, the
same could in no way have seriously injured their
reputation, or otherwise prejudiced them, lawsuits
having become a common occurrence in present
society. What is important, and has been correctly
established in the decision of the court below, is
that said defendants were not guilty of any
improper conduct in the whole deplorable affair.
This Court, therefore, reduces the damages
awarded to P5,000 only.
Summing up, the Court rules:
(1) That a foreign divorce between Filipino
citizens, sought and decreed after the effectivity of
the present Civil Code (Rep. Act 386), is not
entitled to recognition as valid in this jurisdiction;
and neither is the marriage contracted with
another party by the divorced consort,
subsequently to the foreign decree of divorce,
entitled to validity in the country;
(2) That the remarriage of divorced wife and her
co-habitation with a person other than the lawful
husband entitle the latter to a decree of legal
separation conformably to Philippine law;
(3) That the desertion and securing of an invalid
divorce decree by one consort entitles the other to
recover damages;
(4) That an action for alienation of affections
against the parents of one consort does not lie in
the absence of proof of malice or unworthy motives
on their part.
WHEREFORE, the decision under appeal is
hereby modified as follows;
(1) Adjudging plaintiff-appellant Pastor Tenchavez
entitled to a decree of legal separation from
defendant Vicenta F. Escaño;
(2) Sentencing defendant-appellee Vicenta
Escaño to pay plaintiff-appellant Tenchavez the
amount of P25,000 for damages and attorneys'
fees;
(3) Sentencing appellant Pastor Tenchavez to pay
the appellee, Mamerto Escaño and the estate of
his wife, the deceased Mena Escaño, P5,000 by
way of damages and attorneys' fees.
Neither party to recover costs.
Bengzon, C.J., Bautista Angelo, Concepcion,
Dizon, Regala, Makalintal, Bengzon, J.P. and
Zaldivar, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17396 May 30, 1962
CECILIO PE, ET AL., plaintiffs-appellants,
vs.
ALFONSO PE, defendant-appellee.
Cecilio L. Pe for and in his own behalf as plaintiff-
appellant.
Leodegario L. Mogol for defendant-appellee.
BAUTISTA ANGELO, J.:
88
Plaintiffs brought this action before the Court of
First Instance of Manila to recover moral,
compensatory, exemplary and corrective
damages in the amount of P94,000.00 exclusive of
attorney's fees and expenses of litigation.
Defendant, after denying some allegations
contained in the complaint, set up as a defense
that the facts alleged therein, even if true, do not
constitute a valid cause of action.
After trial, the lower court, after finding that
defendant had carried on a love affair with one
Lolita Pe, an unmarried woman, being a married
man himself, declared that defendant cannot be
held liable for moral damages it appearing that
plaintiffs failed to prove that defendant, being
aware of his marital status, deliberately and in bad
faith tried to win Lolita's affection. So it rendered
decision dismissing the complaint. 1äwphï1.ñët
Plaintiffs brought this case on appeal before this
Court on the ground that the issues involved are
purely of law.
The facts as found by the trial court are: Plaintiffs
are the parents, brothers and sisters of one Lolita
Pe. At the time of her disappearance on April 14,
1957, Lolita was 24 years old and unmarried.
Defendant is a married man and works as agent of
the La Perla Cigar and Cigarette Factory. He used
to stay in the town of Gasan, Marinduque, in
connection with his aforesaid occupation. Lolita
was staying with her parents in the same town.
Defendant was an adopted son of a Chinaman
named Pe Beco, a collateral relative of Lolita's
father. Because of such fact and the similarity in
their family name, defendant became close to the
plaintiffs who regarded him as a member of their
family. Sometime in 1952, defendant frequented
the house of Lolita on the pretext that he wanted
her to teach him how to pray the rosary. The two
eventually fell in love with each other and
conducted clandestine trysts not only in the town
of Gasan but also in Boac where Lolita used to
teach in a barrio school. They exchanged love
notes with each other the contents of which reveal
not only their infatuation for each other but also the
extent to which they had carried their relationship.
The rumors about their love affairs reached the
ears of Lolita's parents sometime, in 1955, and
since then defendant was forbidden from going to
their house and from further seeing Lolita. The
plaintiffs even filed deportation proceedings
against defendant who is a Chinese national. The
affair between defendant and Lolita continued
nonetheless.
Sometime in April, 1957, Lolita was staying with
her brothers and sisters at their residence at 54-B
España Extension, Quezon City. On April 14,
1957, Lolita disappeared from said house. After
she left, her brothers and sisters checked up her
thing and found that Lolita's clothes were gone.
However, plaintiffs found a note on a crumpled
piece of paper inside Lolita's aparador. Said note,
written on a small slip of paper approximately 4" by
3" in size, was in a handwriting recognized to be
that of defendant's. In English it reads:
Honey, suppose I leave here on Sunday
night, and that's 13th of this month and we
will have a date on the 14th, that's Monday
morning at 10 a.m.
Reply
Love
The disappearance of Lolita was reported to the
police authorities and the NBI but up to the present
there is no news or trace of her whereabouts.
The present action is based on Article 21 of the
New Civil Code which provides:
Any person who wilfully causes loss or
injury to another in a manner which is
contrary to morals, good customs or public
policy shall compensate the latter for the
damage.
There is no doubt that the claim of plaintiffs for
damages is based on the fact that defendant,
being a married man, carried on a love affair with
Lolita Pe thereby causing plaintiffs injury in a
manner contrary to morals, good customs and
public policy. But in spite of the fact that plaintiffs
have clearly established that in illicit affair was
carried on between defendant and Lolita which
caused great damage to the name and reputation
of plaintiffs who are her parents, brothers and
sisters, the trial court considered their complaint
not actionable for the reason that they failed to
prove that defendant deliberately and in bad faith
tried to win Lolita's affection Thus, the trial court
said: "In the absence of proof on this point, the
court may not presume that it was the defendant
who deliberately induced such relationship. We
cannot be unmindful of the uncertainties and
sometimes inexplicable mysteries of the human
emotions. It is a possibility that the defendant and
Lolita simply fell in love with each other, not only
without any desire on their part, but also against
their better judgment and in full consciousness of
what it will bring to both of them. This is specially
89
so with respect to Lolita, being an unmarried
woman, falling in love with defendant who is a
married man."
We disagree with this view. The circumstances
under which defendant tried to win Lolita's
affection cannot lead, to any other conclusion than
that it was he who, thru an ingenious scheme or
trickery, seduced the latter to the extent of making
her fall in love with him. This is shown by the fact
that defendant frequented the house of Lolita on
the pretext that he wanted her to teach him how to
pray the rosary. Because of the frequency of his
visits to the latter's family who was allowed free
access because he was a collateral relative and
was considered as a member of her family, the two
eventually fell in love with each other and
conducted clandestine love affairs not only in
Gasan but also in Boac where Lolita used to teach
in a barrio school. When the rumors about their
illicit affairs reached the knowledge of her parents,
defendant was forbidden from going to their house
and even from seeing Lolita. Plaintiffs even filed
deportation proceedings against defendant who is
a Chinese national. Nevertheless, defendant
continued his love affairs with Lolita until she
disappeared from the parental home. Indeed, no
other conclusion can be drawn from this chain of
events than that defendant not only deliberately,
but through a clever strategy, succeeded in
winning the affection and love of Lolita to the
extent of having illicit relations with her. The wrong
he has caused her and her family is indeed
immeasurable considering the fact that he is a
married man. Verily, he has committed an injury to
Lolita's family in a manner contrary to morals, good
customs and public policy as contemplated in
Article 21 of the new Civil Code.
WHEREFORE, the decision appealed from is
reversed. Defendant is hereby sentenced to pay
the plaintiffs the sum of P5,000.00 as damages
and P2,000.00 as attorney's fees and expenses of
litigations. Costs against appellee.
Padilla, Labrador, Concepcion, Reyes, J.B.L.,
Barrera, Paredes and Dizon, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-20089 December 26, 1964
BEATRIZ P. WASSMER, plaintiff-appellee,
vs.
FRANCISCO X. VELEZ, defendant-appellant.
Jalandoni & Jamir for defendant-appellant.
Samson S. Alcantara for plaintiff-appellee.
BENGZON, J.P., J.:
The facts that culminated in this case started with
dreams and hopes, followed by appropriate
planning and serious endeavors, but terminated in
frustration and, what is worse, complete public
humiliation.
Francisco X. Velez and Beatriz P. Wassmer,
following their mutual promise of love, decided to
get married and set September 4, 1954 as the big
day. On September 2, 1954 Velez left this note for
his bride-to-be:
Dear Bet —
Will have to postpone wedding — My
mother opposes it. Am leaving on the
Convair today.
Please do not ask too many people
about the reason why — That would
only create a scandal.
Paquing
But the next day, September 3, he sent her the
following telegram:
NOTHING CHANGED REST ASSURED
RETURNING VERY SOON APOLOGIZE
MAMA PAPA LOVE.
PAKING
Thereafter Velez did not appear nor was he heard
from again.
Sued by Beatriz for damages, Velez filed no
answer and was declared in default. Plaintiff
adduced evidence before the clerk of court as
commissioner, and on April 29, 1955, judgment
90
was rendered ordering defendant to pay plaintiff
P2,000.00 as actual damages; P25,000.00 as
moral and exemplary damages; P2,500.00 as
attorney's fees; and the costs.
On June 21, 1955 defendant filed a "petition for
relief from orders, judgment and proceedings and
motion for new trial and reconsideration." Plaintiff
moved to strike it cut. But the court, on August 2,
1955, ordered the parties and their attorneys to
appear before it on August 23, 1955 "to explore at
this stage of the proceedings the possibility of
arriving at an amicable settlement." It added that
should any of them fail to appear "the petition for
relief and the opposition thereto will be deemed
submitted for resolution."
On August 23, 1955 defendant failed to appear
before court. Instead, on the following day his
counsel filed a motion to defer for two weeks the
resolution on defendant’s petition for relief. The
counsel stated that he would confer with defendant
in Cagayan de Oro City — the latter's residence —
on the possibility of an amicable element. The
court granted two weeks counted from August 25,
1955.
Plaintiff manifested on June 15, 1956 that the two
weeks given by the court had expired on
September 8, 1955 but that defendant and his
counsel had failed to appear.
Another chance for amicable settlement was given
by the court in its order of July 6, 1956 calling the
parties and their attorneys to appear on July 13,
1956. This time, however, defendant's counsel
informed the court that chances of settling the case
amicably were nil.
On July 20, 1956 the court issued an order denying
defendant's aforesaid petition. Defendant has
appealed to this Court. In his petition of June 21,
1955 in the court a quo defendant alleged
excusable negligence as ground to set aside the
judgment by default. Specifically, it was stated that
defendant filed no answer in the belief that an
amicable settlement was being negotiated.
A petition for relief from judgment on grounds of
fraud, accident, mistake or excusable negligence,
must be duly supported by an affidavit of merits
stating facts constituting a valid defense. (Sec. 3,
Rule 38, Rules of Court.) Defendant's affidavit of
merits attached to his petition of June 21, 1955
stated: "That he has a good and valid defense
against plaintiff's cause of action, his failure to
marry the plaintiff as scheduled having been due
to fortuitous event and/or circumstances beyond
his control." An affidavit of merits like this stating
mere conclusions or opinions instead of facts is
not valid. (Cortes vs. Co Bun Kim, L-3926, Oct. 10,
1951; Vaswani vs. P. Tarrachand Bros., L-15800,
December 29, 1960.)
Defendant, however, would contend that the
affidavit of merits was in fact unnecessary, or a
mere surplusage, because the judgment sought to
be set aside was null and void, it having been
based on evidence adduced before the clerk of
court. In Province of Pangasinan vs. Palisoc, L-
16519, October 30, 1962, this Court pointed out
that the procedure of designating the clerk of court
as commissioner to receive evidence is
sanctioned by Rule 34 (now Rule 33) of the Rules
of Court. Now as to defendant's consent to said
procedure, the same did not have to be obtained
for he was declared in default and thus had no
standing in court (Velez vs. Ramas, 40 Phil. 787;
Alano vs. Court of First Instance, L-14557,
October 30, 1959).
In support of his "motion for new trial and
reconsideration," defendant asserts that the
judgment is contrary to law. The reason given is
that "there is no provision of the Civil Code
authorizing" an action for breach of promise to
marry. Indeed, our ruling in Hermosisima vs. Court
of Appeals (L-14628, Sept. 30, 1960), as
reiterated in Estopa vs. Biansay (L-14733, Sept.
30, 1960), is that "mere breach of a promise to
marry" is not an actionable wrong. We pointed out
that Congress deliberately eliminated from the
draft of the new Civil Code the provisions that
would have it so.
It must not be overlooked, however, that the extent
to which acts not contrary to law may be
perpetrated with impunity, is not limitless for Article
21 of said Code provides that "any person who
wilfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public
policy shall compensate the latter for the damage."
The record reveals that on August 23, 1954
plaintiff and defendant applied for a license to
contract marriage, which was subsequently issued
(Exhs. A, A-1). Their wedding was set for
September 4, 1954. Invitations were printed and
distributed to relatives, friends and acquaintances
(Tsn., 5; Exh. C). The bride-to-be's trousseau,
party drsrses and other apparel for the important
occasion were purchased (Tsn., 7-8). Dresses for
the maid of honor and the flower girl were
prepared. A matrimonial bed, with accessories,
was bought. Bridal showers were given and gifts
received (Tsn., 6; Exh. E). And then, with but two
91
days before the wedding, defendant, who was
then 28 years old,: simply left a note for plaintiff
stating: "Will have to postpone wedding — My
mother opposes it ... " He enplaned to his home
city in Mindanao, and the next day, the day before
the wedding, he wired plaintiff: "Nothing changed
rest assured returning soon." But he never
returned and was never heard from again.
Surely this is not a case of mere breach of promise
to marry. As stated, mere breach of promise to
marry is not an actionable wrong. But to formally
set a wedding and go through all the above-
described preparation and publicity, only to walk
out of it when the matrimony is about to be
solemnized, is quite different. This is palpably and
unjustifiably contrary to good customs for which
defendant must be held answerable in damages in
accordance with Article 21 aforesaid.
Defendant urges in his afore-stated petition that
the damages awarded were excessive. No
question is raised as to the award of actual
damages. What defendant would really assert
hereunder is that the award of moral and
exemplary damages, in the amount of P25,000.00,
should be totally eliminated.
Per express provision of Article 2219 (10) of the
New Civil Code, moral damages are recoverable
in the cases mentioned in Article 21 of said Code.
As to exemplary damages, defendant contends
that the same could not be adjudged against him
because under Article 2232 of the New Civil Code
the condition precedent is that "the defendant
acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner." The argument
is devoid of merit as under the above-narrated
circumstances of this case defendant clearly acted
in a "wanton..., reckless [and] oppressive manner."
This Court's opinion, however, is that considering
the particular circumstances of this case,
P15,000.00 as moral and exemplary damages is
deemed to be a reasonable award.
PREMISES CONSIDERED, with the above-
indicated modification, the lower court's judgment
is hereby affirmed, with costs.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L.,
Barrera, Paredes, Dizon, Regala, Makalintal, and
Zaldivar, JJ.,concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-18630 December 17, 1966
APOLONIO TANJANCO, petitioner,
vs.
HON. COURT OF APPEALS and ARACELI
SANTOS, respondents.
P. Carreon and G. O. Veneracion, Jr. for petitioner.
Antonio V. Bonoan for respondents.
REYES, J.B.L., J.:
Appeal from a decision of the Court of Appeals (in
its Case No. 27210-R) revoking an order of the
Court of First Instance of Rizal (in Civil Case No.
Q-4797) dismissing appellant's action for support
and damages.
The essential allegations of the complaint are to
the effect that, from December, 1957, the
defendant (appellee herein), Apolonio Tanjanco,
courted the plaintiff, Araceli Santos, both being of
adult age; that "defendant expressed and
professed his undying love and affection for
plaintiff who also in due time reciprocated the
tender feelings"; that in consideration of
defendant's promise of marriage plaintiff
consented and acceded to defendant's pleas for
carnal knowledge; that regularly until December
1959, through his protestations of love and
promises of marriage, defendant succeeded in
having carnal access to plaintiff, as a result of
which the latter conceived a child; that due to her
pregnant condition, to avoid embarrassment and
social humiliation, plaintiff had to resign her job as
secretary in IBM Philippines, Inc., where she was
receiving P230.00 a month; that thereby plaintiff
became unable to support herself and her baby;
that due to defendant's refusal to marry plaintiff, as
promised, the latter suffered mental anguish,
besmirched reputation, wounded feelings, moral
shock, and social humiliation. The prayer was for
a decree compelling the defendant to recognize
the unborn child that plaintiff was bearing; to pay
her not less than P430.00 a month for her support
and that of her baby, plus P100,000.00 in moral
and exemplary damages, plus P10,000.00
attorney's fees.
92
Upon defendant's motion to dismiss, the court of
first instance dismissed the complaint for failure to
state a cause of action.
Plaintiff Santos duly appealed to the Court of
Appeals, and the latter ultimately decided the
case, holding with the lower court that no cause of
action was shown to compel recognition of a child
as yet unborn, nor for its support, but decreed that
the complaint did state a cause of action for
damages, premised on Article 21 of the Civil Code
of the Philippines, prescribing as follows:
ART. 21. Any person who wilfully causes
loss or injury to another in a manner that is
contrary to morals, good customs or public
policy shall compensate the latter for the
damage.
The Court of Appeals, therefore, entered judgment
setting aside the dismissal and directing the court
of origin to proceed with the case.
Defendant, in turn, appealed to this Court,
pleading that actions for breach of a promise to
marry are not permissible in this jurisdiction, and
invoking the rulings of this Court in Estopa vs.
Piansay, L-14733, September 30,
1960; Hermosisima vs. Court of Appeals, L-14628,
January 29, 1962; and De Jesus vs. SyQuia, 58
Phil. 886.
We find this appeal meritorious.
In holding that the complaint stated a cause of
action for damages, under Article 21 above
mentioned, the Court of Appeals relied upon and
quoted from the memorandum submitted by the
Code Commission to the Legislature in 1949 to
support the original draft of the Civil Code.
Referring to Article 23 of the draft (now Article 21
of the Code), the Commission stated:
But the Code Commission has gone
farther than the sphere of wrongs defined
or determined by positive law. Fully
sensible that there are countless gaps in
the statutes, which leave so many victims
of moral wrongs helpless, even though
they have actually suffered material and
moral injury, the Commission has deemed
it necessary, in the interest of justice, to
incorporate in the proposed Civil Code the
following rule:
"ART. 23. Any person who wilfully
causes loss or injury to another in
a manner that is contrary to
morals, good customs or public
policy shall compensate the latter
for the damage."
An example will illustrate the purview of the
foregoing norm: "A" seduces the nineteen-
year old daughter of "X". A promise of
marriage either has not been made, or can
not be proved. The girl becomes pregnant.
Under the present laws, there is no crime,
as the girl is above eighteen years of age.
Neither can any civil action for breach of
promise of marriage be filed. Therefore,
though the grievous moral wrong has been
committed, and though the girl and her
family have suffered incalculable moral
damage, she and her parents cannot bring
any action for damages. But under the
proposed article, she and her parents
would have such a right of action.
The Court of Appeals seems to have overlooked
that the example set forth in the Code
Commission's memorandum refers to a tort upon
a minor who has been seduced. The essential
feature is seduction, that in law is more than mere
sexual intercourse, or a breach of a promise of
marriage; it connotes essentially the idea of deceit,
enticement, superior power or abuse of confidence
on the part of the seducer to which the woman has
yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S.
vs. Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra)
that —
To constitute seduction there must in all
cases be some sufficient promise or
inducement and the woman must yield
because of the promise or other
inducement. If she consents merely from
carnal lust and the intercourse is from
mutual desire, there is no seduction (43
Cent. Dig. tit. Seduction, par. 56). She
must be induced to depart from the path of
virtue by the use of some species of arts,
persuasions and wiles, which are
calculated to have and do have that effect,
and which result in her ultimately
submitting her person to the sexual
embraces of her seducer (27 Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the
woman, the enticement, persuasion or
deception is the essence of the injury; and
93
 a mere proof of intercourse is insufficient
to warrant a recover.
Accordingly it is not seduction where the
willingness arises out of sexual desire or
curiosity of the female, and the defendant
merely affords her the needed opportunity
for the commission of the act. It has been
emphasized that to allow a recovery in all
such cases would tend to the
demoralization of the female sex, and
would be a reward for unchastity by which
a class of adventuresses would be swift to
profit." (47 Am. Jur. 662)
Bearing these principles in mind, let us examine
the complaint. The material allegations there are
as follows:
I. That the plaintiff is of legal age, single,
and residing at 56 South E. Diliman,
Quezon City, while defendant is also of
legal age, single and residing at 525 Padre
Faura, Manila, where he may be served
with summons;
II. That the plaintiff and the defendant
became acquainted with each other
sometime in December, 1957 and soon
thereafter, the defendant started visiting
and courting the plaintiff;
III. That the defendant's visits were regular
and frequent and in due time the defendant
expressed and professed his undying love
and affection for the plaintiff who also in
due time reciprocated the tender feelings;
IV. That in the course of their engagement,
the plaintiff and the defendant as are wont
of young people in love had frequent
outings and dates, became very close and
intimate to each other and sometime in
July, 1958, in consideration of the
defendant's promises of marriage, the
plaintiff consented and acceded to the
former's earnest and repeated pleas to
have carnal knowledge with him;
V. That subsequent thereto and regularly
until about July, 1959 except for a short
period in December, 1958 when the
defendant was out of the country, the
defendant through his protestations of love
and promises of marriage succeeded in
having carnal knowledge with the plaintiff;
VI. That as a result of their intimate
relationship, the plaintiff started conceiving
which was confirmed by a doctor
sometime in July, 1959;
VII. That upon being certain of her
pregnant condition, the plaintiff informed
the defendant and pleaded with him to
make good his promises of marriage, but
instead of honoring his promises and
righting his wrong, the defendant stopped
and refrained from seeing the plaintiff
since about July, 1959 has not visited the
plaintiff and to all intents and purposes has
broken their engagement and his
promises.
Over and above the partisan allegations, the facts
stand out that for one whole year, from 1958 to
1959, the plaintiff-appellee, a woman of adult age,
maintained intimate sexual relations with
appellant, with repeated acts of intercourse. Such
conduct is incompatible with the idea of seduction.
Plainly there is here voluntariness and mutual
passion; for had the appellant been deceived, had
she surrendered exclusively because of the deceit,
artful persuasions and wiles of the defendant, she
would not have again yielded to his embraces,
much less for one year, without exacting early
fulfillment of the alleged promises of marriage, and
would have cut chart all sexual relations upon
finding that defendant did not intend to fulfill his
promises. Hence, we conclude that no case is
made under Article 21 of the Civil Code, and no
other cause of action being alleged, no error was
committed by the Court of First Instance in
dismissing the complaint.
Of course, the dismissal must be understood as
without prejudice to whatever actions may
correspond to the child of the plaintiff against the
defendant-appellant, if any. On that point, this
Court makes no pronouncement, since the child's
own rights are not here involved.
FOR THE FOREGOING REASONS, the decision
of the Court of Appeals is reversed, and that of the
Court of First Instance is affirmed. No costs.
Concepcion, C.J., Barrera, Dizon, Regala,
Makalintal, Bengzon, J.P., Zaldivar, Sanchez and
Castro, JJ., concur.
94

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 107383 February 20, 1996
CECILIA ZULUETA, petitioner,
vs.
COURT OF APPEALS and ALFREDO
MARTIN, respondents.
DECISION
MENDOZA, J.:
This is a petition to review the decision of the Court
of Appeals, affirming the decision of the Regional
Trial Court of Manila (Branch X) which ordered
petitioner to return documents and papers taken
by her from private respondent's clinic without the
latter's knowledge and consent.
The facts are as follows:
Petitioner Cecilia Zulueta is the wife of private
respondent Alfredo Martin. On March 26, 1982,
petitioner entered the clinic of her husband, a
doctor of medicine, and in the presence of her
mother, a driver and private respondent's
secretary, forcibly opened the drawers and cabinet
in her husband's clinic and took 157 documents
consisting of private correspondence between Dr.
Martin and his alleged paramours, greetings
cards, cancelled checks, diaries, Dr. Martin's
passport, and photographs. The documents and
papers were seized for use in evidence in a case
for legal separation and for disqualification from
the practice of medicine which petitioner had filed
against her husband.
Dr. Martin brought this action below for recovery of
the documents and papers and for damages
against petitioner. The case was filed with the
Regional Trial Court of Manila, Branch X, which,
after trial, rendered judgment for private
respondent, Dr. Alfredo Martin, declaring him "the
capital/exclusive owner of the properties described
in paragraph 3 of plaintiff's Complaint or those
further described in the Motion to Return and
Suppress" and ordering Cecilia Zulueta and any
person acting in her behalf to a immediately return
the properties to Dr. Martin and to pay him
P5,000.00, as nominal damages; P5,000.00, as
moral damages and attorney's fees; and to pay the
costs of the suit. The writ of preliminary injunction
earlier issued was made final and petitioner Cecilia
Zulueta and her attorneys and representatives
were enjoined from "using or submitting/admitting
as evidence" the documents and papers in
question. On appeal, the Court of Appeals affirmed
the decision of the Regional Trial Court. Hence this
petition.
There is no question that the documents and
papers in question belong to private respondent,
Dr. Alfredo Martin, and that they were taken by his
wife, the herein petitioner, without his knowledge
and consent. For that reason, the trial court
declared the documents and papers to be
properties of private respondent, ordered
petitioner to return them to private respondent and
enjoined her from using them in evidence. In
appealing from the decision of the Court of
Appeals affirming the trial court's decision,
petitioner's only ground is that in Alfredo Martin v.
Alfonso Felix, Jr.,1 this Court ruled that the
documents and papers (marked as Annexes A-1
to J-7 of respondent's comment in that case) were
admissible in evidence and, therefore, their use by
petitioner's attorney, Alfonso Felix did not
constitute malpractice or gross misconduct, For
this reason it is contended that the Court of
Appeals erred in affirming the decision of the trial
court instead of dismissing private respondent's
complaint.
Petitioner's contention has no merit. The case
against Atty. Felix, Jr. was for disbarment. Among
other things, private respondent, Dr. Alfredo
Martin, as complainant in that case, charged that
in using the documents in evidence, Atty. Felix, Jr.
committed malpractice or gross misconduct
because of the injunctive order of the trial court. In
dismissing the complaint against Atty. Felix, Jr.,
this Court took note of the following defense of
Atty. Felix; Jr. which it found to be "impressed with
merit:"2
On the alleged malpractice or gross
misconduct of respondent [Alfonso Felix,
Jr.], he maintains that:
....
4. When respondent refiled Cecilia's case
for legal separation before the Pasig
Regional Trial Court, there was admittedly
an order of the Manila Regional Trial Court
prohibiting Cecilia from using the
95
 documents Annex "A-1 to J-7." On
September 6, 1983, however having
appealed the said order to this Court on a
petition for certiorari, this Court issued a
restraining order on aforesaid date which
order temporarily set aside the order of the
trial court. Hence, during the enforceability
of this Court's order, respondent's request
for petitioner to admit the genuineness and
authenticity of the subject annexes cannot
be looked upon as malpractice. Notably,
petitioner Dr. Martin finally admitted the
truth and authenticity of the questioned
annexes, At that point in time, would it
have been malpractice for respondent to
use petitioner's admission as evidence
against him in the legal separation case
pending in the Regional Trial Court of
Makati? Respondent submits it is not
malpractice.
Significantly, petitioner's admission was
done not thru his counsel but by Dr. Martin
himself under oath, Such verified
admission constitutes an affidavit, and,
therefore, receivable in evidence against
him. Petitioner became bound by his
admission. For Cecilia to avail herself of
her husband's admission and use the
same in her action for legal separation
cannot be treated as malpractice.
Thus, the acquittal of Atty. Felix, Jr. in the
administrative case amounts to no more than a
declaration that his use of the documents and
papers for the purpose of securing Dr. Martin's
admission as to their genuiness and authenticity
did not constitute a violation of the injunctive order
of the trial court. By no means does the decision in
that case establish the admissibility of the
documents and papers in question.
It cannot be overemphasized that if Atty. Felix, Jr.
was acquitted of the charge of violating the writ of
preliminary injunction issued by the trial court, it
was only because, at the time he used the
documents and papers, enforcement of the order
of the trial court was temporarily restrained by this
Court. The TRO issued by this Court was
eventually lifted as the petition for certiorari filed by
petitioner against the trial court's order was
dismissed and, therefore, the prohibition against
the further use of the documents and papers
became effective again.
Indeed the documents and papers in question are
inadmissible in evidence. The constitutional
injunction declaring "the privacy of communication
and correspondence [to be] inviolable"3 is no less
applicable simply because it is the wife (who thinks
herself aggrieved by her husband's infidelity) who
is the party against whom the constitutional
provision is to be enforced. The only exception to
the prohibition in the Constitution is if there is a
"lawful order [from a] court or when public safety
or order requires otherwise, as prescribed by
law."4 Any violation of this provision renders the
evidence obtained inadmissible "for any purpose
in any proceeding." 5
The intimacies between husband and wife do not
justify any one of them in breaking the drawers and
cabinets of the other and in ransacking them for
any telltale evidence of marital infidelity. A person,
by contracting marriage, does not shed his/her
integrity or his right to privacy as an individual and
the constitutional protection is ever available to
him or to her.
The law insures absolute freedom of
communication between the spouses by making it
privileged. Neither husband nor wife may testify for
or against the other without the consent of the
affected spouse while the marriage
subsists.6Neither may be examined without the
consent of the other as to any communication
received in confidence by one from the other
during the marriage, save for specified
exceptions.7 But one thing is freedom of
communication; quite another is a compulsion for
each one to share what one knows with the other.
And this has nothing to do with the duty of fidelity
that each owes to the other.
WHEREFORE, the petition for review is DENIED
for lack of merit.
SO ORDERED.
Regalado, Romero and Puno, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-69866 April 15, 1988
ROGELIO ABERCA, RODOLFO BENOSA,
NESTOR BODINO NOEL ETABAG DANILO DE
LA FUENTE, BELEN DIAZ-FLORES, MANUEL
MARIO GUZMAN, ALAN JAZMINEZ, EDWIN
LOPEZ, ALFREDO MANSOS, ALEX
96
MARCELINO, ELIZABETH PROTACIO-
MARCELINO, JOSEPH OLAYER, CARLOS
PALMA, MARCO PALO, ROLANDO SALUTIN,
BENJAMIN SESGUNDO, ARTURO TABARA,
EDWIN TULALIAN and REBECCA
TULALIAN petitioners,
vs.
MAJ. GEN. FABIAN VER, COL. FIDEL
SINGSON, COL. ROLANDO ABADILLA, COL.
GERARDO B. LANTORIA, COL. GALILEO
KINTANAR, 1ST LT. COL. PANFILO M.
LACSON, MAJ. RODOLFO AGUINALDO, CAPT.
DANILO PIZARRO, 1ST LT. PEDRO TANGO,
1ST LT. ROMEO RICARDO, 1ST LT. RAUL
BACALSO, MSGT BIENVENIDO BALABA and
REGIONAL TRIAL COURT, National Capital
Judicial Region, Branch XCV (95), Quezon
City, respondents.
YAP, J.:
This petition for certiorari presents vital issues not
heretofore passed upon by this Court. It poses the question
whether the suspension of the privilege of the writ of
habeas corpus bars a civil action for damages for illegal
searches conducted by military personnel and other
violations of rights and liberties guaranteed under the
Constitution. If such action for damages may be
maintained, who can be held liable for such violations: only
the military personnel directly involved and/or their
superiors as well.
This case stems from alleged illegal searches and
seizures and other violations of the rights and
liberties of plaintiffs by various intelligence units of
the Armed Forces of the Philippines, known as
Task Force Makabansa (TFM) ordered by General
Fabian Ver "to conduct pre-emptive strikes against
known communist-terrorist (CT) underground
houses in view of increasing reports about CT
plans to sow disturbances in Metro Manila,"
Plaintiffs allege, among others, that complying with
said order, elements of the TFM raided several
places, employing in most cases defectively
issued judicial search warrants; that during these
raids, certain members of the raiding party
confiscated a number of purely personal items
belonging to plaintiffs; that plaintiffs were arrested
without proper warrants issued by the courts; that
for some period after their arrest, they were denied
visits of relatives and lawyers; that plaintiffs were
interrogated in violation of their rights to silence
and counsel; that military men who interrogated
them employed threats, tortures and other forms
of violence on them in order to obtain incriminatory
information or confessions and in order to punish
them; that all violations of plaintiffs constitutional
rights were part of a concerted and deliberate plan
to forcibly extract information and incriminatory
statements from plaintiffs and to terrorize, harass
and punish them, said plans being previously
known to and sanctioned by defendants.
Plaintiffs sought actual/compensatory damages
amounting to P39,030.00; moral damages in the
amount of at least P150,000.00 each or a total of
P3,000,000.00; exemplary damages in the amount
of at least P150,000.00 each or a total of
P3,000,000.00; and attorney's fees amounting to
not less than P200,000.00.
A motion to dismiss was filed by defendants,
through their counsel, then Solicitor-General
Estelito Mendoza, alleging that (1) plaintiffs may
not cause a judicial inquiry into the circumstances
of their detention in the guise of a damage suit
because, as to them, the privilege of the writ of
habeas corpus is suspended; (2) assuming that
the courts can entertain the present action,
defendants are immune from liability for acts done
in the performance of their official duties; and (3)
the complaint states no cause of action against the
defendants. Opposition to said motion to dismiss
was filed by plaintiffs Marco Palo, Danilo de la
Fuente, Benjamin Sesgundo, Nel Etabag, Alfredo
Mansos and Rolando Salutin on July 8, 1983, and
by plaintiffs Edwin Lopez, Manuel Mario Guzman,
Alan Jasminez, Nestor Bodino, Carlos Palma,
Arturo Tabara, Joseph Olayer, Rodolfo Benosa,
Belen Diaz, Flores, Rogelio Aberca, Alex
Marcelino and Elizabeth Marcelino on July 21,
1983. On November 7, 1983, a Consolidated
Reply was filed by defendants' counsel.
Then, on November 8, 1983, the Regional Trial
Court, National Capital Region, Branch 95, Judge
Willelmo C. Fortun, Presiding, 1 issued a resolution
granting the motion to dismiss. I sustained, lock,
stock and barrel, the defendants' contention (1) the
plaintiffs may not cause a judicial inquiry into the
circumstances of their detention in the guise of a
damage suit because, as to them, the privilege of
the writ of habeas corpus is suspended; (2) that
assuming that the court can entertain the present
action, defendants are immune from liability for
acts done in the performance of their official duties;
and (3) that the complaint states no cause of action
against defendants, since there is no allegation
that the defendants named in the complaint
confiscated plaintiffs' purely personal properties in
violation of their constitutional rights, and with the
possible exception of Major Rodolfo Aguinaldo
and Sergeant Bienvenido Balabo committed acts
of torture and maltreatment, or that the defendants
had the duty to exercise direct supervision and
control of their subordinates or that they had
vicarious liability as employers under Article 2180
97
of the Civil Code. The lower court stated, "After a
careful study of defendants' arguments, the court
finds the same to be meritorious and must,
therefore, be granted. On the other hand, plaintiffs'
arguments in their opposition are lacking in merit."
A motion to set aside the order dismissing the
complaint and a supplemental motion for
reconsideration was filed by the plaintiffs on
November 18, 1983, and November 24, 1983,
respectively. On December 9, 1983, the
defendants filed a comment on the aforesaid
motion of plaintiffs, furnishing a copy thereof to the
attorneys of all the plaintiffs, namely, Attys. Jose
W. Diokno, Procopio Beltran, Rene Sarmiento,
Efren Mercado, Auguso Sanchez, Antonio L.
Rosales, Pedro B. Ella Jr., Arno V. Sanidad,
Alexander Padilla, Joker Arroyo, Rene Saguisag,
Ramon Esguerra and Felicitas Aquino.
On December 15, 1983, Judge Fortun issued an
order voluntarily inhibiting himself from further
proceeding in the case and leaving the resolution
of the motion to set aside the order of dismissal to
Judge Lising, "to preclude any suspicion that he
(Judge Fortun) cannot resolve [the] aforesaid
pending motion with the cold neutrality of an
impartial judge and to put an end to plaintiffs
assertion that the undersigned has no authority or
jurisdiction to resolve said pending motion." This
order prompted plaintiffs to reesolve an
amplificatory motion for reconsideration signed in
the name of the Free Legal Assistance Group
(FLAG) of Mabini Legal Aid Committee, by Attys.
Joker P. Arroyo, Felicitas Aquino and Arno
Sanidad on April 12, 1984. On May 2,1984, the
defendants filed a comment on said amplificatory
motion for reconsideration.
In an order dated May 11, 1984, the trial court,
Judge Esteban Lising, Presiding, without acting on
the motion to set aside order of November 8, 1983,
issued an order, as follows:
It appearing from the records that, indeed,
the following plaintiffs, Rogelio Aberca,
Danilo de la Fuente and Marco Palo,
represented by counsel, Atty. Jose W.
Diokno, Alan Jasminez represented by
counsel, Atty. Augusta Sanchez, Spouses
Alex Marcelino and Elizabeth Protacio-
Marcelino, represented by counsel, Atty.
Procopio Beltran, Alfredo Mansos
represented by counsel, Atty. Rene
Sarmiento, and Rolando Salutin,
represented by counsel, Atty. Efren
Mercado, failed to file a motion to
reconsider the Order of November 8,
1983, dismissing the complaint, nor
interposed an appeal therefrom within the
reglementary period, as prayed for by the
defendants, said Order is now final against
said plaintiffs.
Assailing the said order of May 11, 1984, the
plaintiffs filed a motion for reconsideration on May
28,1984, alleging that it was not true that plaintiffs
Rogelio Aberca, Danilo de la Fuente, Marco Palo,
Alan Jasminez, Alex Marcelino, Elizabeth
Protacio-Marcelino, Alfredo Mansos and Rolando
Salutin failed to file a motion to reconsider the
order of November 8, 1983 dismissing the
complaint, within the reglementary period.
Plaintiffs claimed that the motion to set aside the
order of November 8, 1983 and the amplificatory
motion for reconsideration was filed for all the
plaintiffs, although signed by only some of the
lawyers.
In its resolution of September 21, 1984, the
respondent court dealt with both motions (1) to
reconsider its order of May 11, 1984 declaring that
with respect to certain plaintiffs, the resolution of
November 8, 1983 had already become final, and
(2) to set aside its resolution of November 8, 1983
granting the defendants' motion to dismiss. In the
dispositive portion of the order of September 21,
1984, the respondent court resolved:
(1) That the motion to set aside the order
of finality, dated May 11, 1984, of the
Resolution of dismissal of the complaint of
plaintiffs Rogelio Aberca, Danilo de la
Fuente, Marco Palo, Alan Jasminez Alex
Marcelino, Elizabeth Protacio-Marcelino,
Alfredo Mansos and Rolando Salutin is
deed for lack of merit;
(2) For lack of cause of action as against
the following defendants, to wit:
1. Gen Fabian Ver
2. Col. Fidel Singson
3. Col. Rolando Abadilla
4. Lt. Col. Conrado Lantoria, Jr.
5. Col. Galileo Montanar
6. Col. Panfilo Lacson
7. Capt. Danilo Pizaro
98
 8. 1 Lt Pedro Tango
9. Lt. Romeo Ricardo
10. Lt. Raul Bacalso
the motion to set aside and reconsider the
Resolution of dismissal of the present
action or complaint, dated November 8,
1983, is also denied but in so far as it
affects and refers to defendants, to wit:
1. Major Rodolfo Aguinaldo, and
2. Master Sgt. Bienvenido Balaba
the motion to reconsider and set aside the
Resolution of dismissal dated November
3, 1983 is granted and the Resolution of
dismissal is, in this respect, reconsidered
and modified.
Hence, petitioners filed the instant petition for
certiorari on March 15, 1985 seeking to annul and
set aside the respondent court's resolution of
November 8, 1983, its order of May 11, 1984, and
its resolution dated September 21, 1984.
Respondents were required to comment on the
petition, which it did on November 9, 1985. A reply
was filed by petitioners on August 26, 1986.
We find the petition meritorious and decide to give
it due course.
At the heart of petitioners' complaint is Article 32
of the Civil Code which provides:
ART. 32. Any public officer or employee, or
any private individual who directly or
indirectly obstructs, defeats, violates or in
any manner impedes or impairs any of the
following rights and liberties of another
person shall be liable to the latter for
damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to
maintain a periodical publication;
(4) Freedom from arbitrary or illegal
detention;
(5) Freedom of suffrage;
(6) The right against deprivation of
property without due process
(7) of law;
(8) The right to a just compensation when
private property is taken for public use;
(9) The right to the equal protection of the
laws;
(10) The right to be secure in one's person,
house, papers, and effects against
unreasonable searches and seizures;
(11) The liberty of abode and of changing
the same;
(12) The privacy of cmmunication and
correspondence;
(13) The right to become a member of
associations or societies for purposes not
contrary to law;
(14) The right to take part in a peaceable
assembly to petition the Government for
redress of grievances;
(15) The right to be free from involuntary
servitude in any form;
(16) The rigth of the accused against
excessive bail;
(17) The rigth of the aaccused to be heard
by himself and counsel, to be informed of
the nature and cause of the accusation
against him, to have a speedy and public
trial, to meet the witnesses face to face,
and to have compulsory process to secure
the attendance of witness in behalf;
(18) Freedom from being compelled to be
a witness against ones self, or from being
forced to confess guilt, or from being
induced by a promise of immunity or
reward to make such confession, except
when the person confessing becomes a
State witness;
(19) Freedom from excessive fines or cruel
and unusual punishment, unless the same
is imposed or inflicted in accordance with
a statute which has not been judicially
declared unconstitutional; and
99
 (20) Freedom of access to the courts.
In any of the cases referred to in this
article, whether or not the defendant's act
or omission constitutes a criminal offense,
the against grieved party has a right to
commence an entirely separate and
distinct civil action for damages, and for
other relief. Such civil action shall proceed
independently of any criminal prosecution
(if the latter be instituted), and may be
proved by a preponderance of evidence.
The indemnity shall include moral
damages. Exemplary damages may also
be adjudicated.
The responsibility herein set forth is not
demandable from a judge unless his act or
omission constitutes a violation of the
Penal Code or other penal statute.
It is obvious that the purpose of the above codal
provision is to provide a sanction to the deeply
cherished rights and freedoms enshrined in the
Constitution. Its message is clear; no man may
seek to violate those sacred rights with impunity.
In times of great upheaval or of social and political
stress, when the temptation is strongest to yield —
borrowing the words of Chief Justice Claudio
Teehankee — to the law of force rather than the
force of law, it is necessary to remind ourselves
that certain basic rights and liberties are
immutable and cannot be sacrificed to the
transient needs or imperious demands of the ruling
power. The rule of law must prevail, or else liberty
will perish. Our commitment to democratic
principles and to the rule of law compels us to
reject the view which reduces law to nothing but
the expression of the will of the predominant power
in the community. "Democracy cannot be a reign
of progress, of liberty, of justice, unless the law is
respected by him who makes it and by him for
whom it is made. Now this respect implies a
maximum of faith, a minimum of Idealism. On
going to the bottom of the matter, we discover that
life demands of us a certain residuum of sentiment
which is not derived from reason, but which reason
nevertheless controls. 2
Seeking to justify the dismissal of plaintiffs'
complaint, the respondents postulate the view that
as public officers they are covered by the mantle
of state immunity from suit for acts done in the
performance of official duties or function In support
of said contention, respondents maintain that —
Respondents are members of the Armed
Forces of the Philippines. Their primary
duty is to safeguard public safety and
order. The Constitution no less provides
that the President may call them "to
prevent or supress lawless violence,
invasion, insurrection or rebellion, or
imminent danger thereof." (Constitution,
Article VII, Section 9).
On January 17, 1981, the President issued
Proclamation No. 2045 lifting martial law
but providing for the continued suspension
of the privilege of the writ of habeas corpus
in view of the remaining dangers to the
security of the nation. The proclamation
also provided "that the call to the Armed
Forces of the Philippines to prevent or
suppress lawless violence, insurrection
rebellion and subversion shall continue to
be in force and effect."
Petitioners allege in their complaint that
their causes of action proceed from
respondent General Ver's order to Task
Force Makabansa to launch pre-emptive
strikes against communist terrorist
underground houses in Metro Manila.
Petitioners claim that this order and its
subsequent implementation by elements
of the task force resulted in the violation of
their constitutional rights against unlawful
searches, seizures and arrest, rights to
counsel and to silence, and the right to
property and that, therefore, respondents
Ver and the named members of the task
force should be held liable for damages.
But, by launching a pre-emptive strike
against communist terrorists, respondent
members of the armed forces merely
performed their official and constitutional
duties. To allow petitioners to recover from
respondents by way of damages for acts
performed in the exercise of such duties
run contrary to the policy considerations to
shield respondents as public officers from
undue interference with their duties and
from potentially disabling threats of hability
(Aarlon v. Fitzgerald 102 S. Ct. 2731-1
Forbes v. Chuoco Tiaco, 16 Phil. 634), and
upon the necessity of protecting the
performance of governmental and public
functions from being harassed unduly or
constantly interrupted by private suits
(McCallan v. State, 35 Cal. App. 605;
Metran v. Paredes, 79 Phil. 819).
100
 xxx xxx xxx
The immunity of public officers from
liability arising from the performance of
their duties is now a settled jurisprudence
Alzua v. Johnson, 21 Phil. 308; Zulueta v.
Nicolas, 102 Phil. 944; Spalding v. Vilas,
161 US 483; 40 L. Ed. 780, 16 S. Ct. 631;
Barr v. Mateo, 360; Butz v. Economon, 438
US 478; 57 L. Ed. 2d 895, 98 S. Ct. 2894;
Scheuer v. Rhodes, 416 US 232; Forbes
v. Chuoco Tiaco, supra; Miller v. de Leune,
602 F. 2d 198; Sami v. US, 617 F. 2d 755).
Respondents-defendants who merely
obeyed the lawful orders of the President
and his call for the suppression of the
rebellion involving petitioners enjoy such
immunity from Suit.3
We find respondents' invocation of the doctrine of
state immunity from suit totally misplaced. The
cases invoked by respondents actually involved
acts done by officers in the performance of official
duties written the ambit of their powers. As held in
Forbes, etc. vs. Chuoco Tiaco and Crossfield: 4
No one can be held legally responsible in
damages or otherwise for doing in a legal
manner what he had authority, under the
law, to do. Therefore, if the Governor-
General had authority, under the law to
deport or expel the defendants, and
circumstances justifying the deportation
and the method of carrying it out are left to
him, then he cannot be held liable in
damages for the exercise of this power.
Moreover, if the courts are without
authority to interfere in any manner, for the
purpose of controlling or interfering with
the exercise of the political powers vested
in the chief executive authority of the
Government, then it must follow that the
courts cannot intervene for the purpose of
declaring that he is liable in damages for
the exercise of this authority.
It may be that the respondents, as members of the
Armed Forces of the Philippines, were merely
responding to their duty, as they claim, "to prevent
or suppress lawless violence, insurrection,
rebellion and subversion" in accordance with
Proclamation No. 2054 of President Marcos,
despite the lifting of martial law on January 27,
1981, and in pursuance of such objective, to
launch pre-emptive strikes against alleged
communist terrorist underground houses. But this
cannot be construed as a blanket license or a
roving commission untrammeled by any
constitutional restraint, to disregard or transgress
upon the rights and liberties of the individual citizen
enshrined in and protected by the Constitution.
The Constitution remains the supreme law of the
land to which all officials, high or low, civilian or
military, owe obedience and allegiance at all times.
Article 32 of the Civil Code which renders any
public officer or employee or any private individual
liable in damages for violating the Constitutional
rights and liberties of another, as enumerated
therein, does not exempt the respondents from
responsibility. Only judges are excluded from
liability under the said article, provided their acts or
omissions do not constitute a violation of the Penal
Code or other penal statute.
This is not to say that military authorities are
restrained from pursuing their assigned task or
carrying out their mission with vigor. We have no
quarrel with their duty to protect the Republic from
its enemies, whether of the left or of the right, or
from within or without, seeking to destroy or
subvert our democratic institutions and imperil
their very existence. What we are merely trying to
say is that in carrying out this task and mission,
constitutional and legal safeguards must be
observed, otherwise, the very fabric of our faith will
start to unravel. In the battle of competing
Ideologies, the struggle for the mind is just as vital
as the struggle of arms. The linchpin in that
psychological struggle is faith in the rule of law.
Once that faith is lost or compromised, the struggle
may well be abandoned.
We do not find merit in respondents' suggestion
that plaintiffs' cause of action is barred by the
suspension of the privilege of the writ of habeas
corpus. Respondents contend that "Petitioners
cannot circumvent the suspension of the privilege
of the writ by resorting to a damage suit aimed at
the same purpose-judicial inquiry into the alleged
illegality of their detention. While the main relief
they ask by the present action is indemnification
for alleged damages they suffered, their causes of
action are inextricably based on the same claim of
violations of their constitutional rights that they
invoked in the habeas corpus case as grounds for
release from detention. Were the petitioners
allowed the present suit, the judicial inquiry barred
by the suspension of the privilege of the writ will
take place. The net result is that what the courts
cannot do, i.e. override the suspension ordered by
the President, petitioners will be able to do by the
mere expedient of altering the title of their action."
101
We do not agree. We find merit in petitioners'
contention that the suspension of the privilege of
the writ of habeas corpus does not destroy
petitioners' right and cause of action for damages
for illegal arrest and detention and other violations
of their constitutional rights. The suspension does
not render valid an otherwise illegal arrest or
detention. What is suspended is merely the right of
the individual to seek release from detention
through the writ of habeas corpus as a speedy
means of obtaining his liberty.
Moreover, as pointed out by petitioners, their right
and cause of action for damages are explicitly
recognized in P.D. No. 1755 which amended
Article 1146 of the Civil Code by adding the
following to its text:
However, when the action (for injury to the
rights of the plaintiff or for a quasi-delict)
arises from or out of any act, activity or
conduct of any public officer involving the
exercise of powers or authority arising
from Martial Law including the arrest,
detention and/or trial of the plaintiff, the
same must be brought within one (1) year.
Petitioners have a point in contending that even
assuming that the suspension of the privilege of
the writ of habeas corpus suspends petitioners'
right of action for damages for illegal arrest and
detention, it does not and cannot suspend their
rights and causes of action for injuries suffered
because of respondents' confiscation of their
private belongings, the violation of their right to
remain silent and to counsel and their right to
protection against unreasonable searches and
seizures and against torture and other cruel and
inhuman treatment.
However, we find it unnecessary to address the
constitutional issue pressed upon us. On March
25, 1986, President Corazon C. Aquino issued
Proclamation No. 2, revoking Proclamation Nos.
2045 and 2045-A and lifting the suspension of the
privilege of the writ of habeas corpus. The question
therefore has become moot and academic.
This brings us to the crucial issue raised in this
petition. May a superior officer under the notion of
respondent superior be answerable for damages,
jointly and severally with his subordinates, to the
person whose constitutional rights and liberties
have been violated?
Respondents contend that the doctrine
of respondent superior is applicable to the case.
We agree. The doctrine of respondent
superior has been generally limited in its
application to principal and agent or to master and
servant (i.e. employer and employee) relationship.
No such relationship exists between superior
officers of the military and their subordinates.
Be that as it may, however, the decisive factor in
this case, in our view, is the language of Article 32.
The law speaks of an officer or employee or
person 'directly' or "indirectly" responsible for the
violation of the constitutional rights and liberties of
another. Thus, it is not the actor alone (i.e. the one
directly responsible) who must answer for
damages under Article 32; the person indirectly
responsible has also to answer for the damages or
injury caused to the aggrieved party.
By this provision, the principle of accountability of
public officials under the Constitution 5 acquires
added meaning and asgilrnes a larger dimension.
No longer may a superior official relax his vigilance
or abdicate his duty to supervise his subordinates,
secure in the thought that he does not have to
answer for the transgressions committed by the
latter against the constitutionally protected rights
and liberties of the citizen. Part of the factors that
propelled people power in February 1986 was the
widely held perception that the government was
callous or indifferent to, if not actually responsible
for, the rampant violations of human rights. While
it would certainly be go naive to expect that
violators of human rights would easily be deterred
by the prospect of facing damage suits, it should
nonetheless be made clear in no ones terms that
Article 32 of the Civil Code makes the persons who
are directly, as well as indirectly, responsible for
the transgression joint tortfeasors.
In the case at bar, the trial court dropped
defendants General Fabian Ver, Col. Fidel
Singson, Col. Rolando Abadilla, Col. Gerardo
Lantoria, Jr., Col. Galileo Kintanar, Col. Panfilo
Lacson, Capt. Danilo Pizarro, lst Lt. Pedro Tango,
Lt. Romeo Ricardo and Lt. Ricardo Bacalso from
the acts of their subordinates. Only Major Rodolfo
Aguinaldo and Master Sgt. Bienvenido Balaba
were kept as defendants on the ground that they
alone 'have been specifically mentioned and
Identified to have allegedly caused injuries on the
persons of some of the plaintiff which acts of
alleged physical violence constitute a delict or
wrong that gave rise to a cause of action. But such
finding is not supported by the record, nor is it in
accord with law and jurisprudence.
Firstly, it is wrong to at the plaintiffs' action for
damages 5 Section 1, Article 19. to 'acts of alleged
physical violence" which constituted delict or
102
wrong. Article 32 clearly specifies as actionable
the act of violating or in any manner impeding or
impairing any of the constitutional rights and
liberties enumerated therein, among others —
1. Freedom from arbitrary arrest or illegal
detention;
2. The right against deprivation of property
without due process of law;
3. The right to be secure in one's person,
house, papers and effects against
unreasonable searches and seizures;
4. The privacy of communication and
correspondence;
5. Freedom from being compelled to be a
witness against one's self, or from being
forced to confess guilt, or from being
induced by a promise of immunity or
reward to make a confession, except when
the person confessing becomes a state
witness.
The complaint in this litigation alleges facts
showing with abundant clarity and details, how
plaintiffs' constitutional rights and liberties
mentioned in Article 32 of the Civil Code were
violated and impaired by defendants. The
complaint speaks of, among others, searches
made without search warrants or based on
irregularly issued or substantially defective
warrants; seizures and confiscation, without
proper receipts, of cash and personal effects
belonging to plaintiffs and other items of property
which were not subversive and illegal nor covered
by the search warrants; arrest and detention of
plaintiffs without warrant or under irregular,
improper and illegal circumstances; detention of
plaintiffs at several undisclosed places of
'safehouses" where they were kept
incommunicado and subjected to physical and
psychological torture and other inhuman,
degrading and brutal treatment for the purpose of
extracting incriminatory statements. The complaint
contains a detailed recital of abuses perpetrated
upon the plaintiffs violative of their constitutional
rights.
Secondly, neither can it be said that only those
shown to have participated "directly" should be
held liable. Article 32 of the Civil Code
encompasses within the ambit of its provisions
those directly, as well as indirectly, responsible for
its violation.
The responsibility of the defendants, whether
direct or indirect, is amply set forth in the
complaint. It is well established in our law and
jurisprudence that a motion to dismiss on the
ground that the complaint states no cause of action
must be based on what appears on the face of the
complaint. 6 To determine the sufficiency of the
cause of action, only the facts alleged in the
complaint, and no others, should be
considered. 7 For this purpose, the motion to
dismiss must hypothetically admit the truth of the
facts alleged in the complaint. 8
Applying this test, it is difficult to justify the trial
court's ruling, dismissing for lack of cause of action
the complaint against all the defendants, except
Major Rodolfo Aguinaldo and Master Sgt.
Bienvenido Balaba. The complaint contained
allegations against all the defendants which, if
admitted hypothetically, would be sufficient to
establish a cause or causes of action against all of
them under Article 32 of the Civil Code.
This brings us to the last issue. Was the trial court
correct in dismissing the complaint with respect to
plaintiffs Rogelio Aberca, Danilo de la Puente,
Marco Palo, Alan Jazminez, Alex Marcelino,
Elizabeth Protacio-Marcelino, Alfredo Mansos and
Rolando Salutin, on the basis of the alleged failure
of said plaintiffs to file a motion for reconsideration
of the court's resolution of November 8, 1983,
granting the respondent's motion to dismiss?
It is undisputed that a timely motion to set aside
said order of November 8, 1983 was filed by
'plaintiffs, through counsel. True, the motion was
signed only by Atty. Joker P. Arroyo, counsel for
Benjamin Sesgulido; Atty. Antonio Rosales,
counsel for Edwin Lopez and Manuel Martin
Guzman; Atty. Pedro B. Ella, Jr., counsel for
Nestor Bodino and Carlos Palma; Atty. Arno V.
Sanidad, counsel for Arturo Tabara; Atty. Felicitas
S. Aquino, counsel for Joseph Olayer; and Atty.
Alexander Padilla, counsel for Rodolfo Benosa.
But the body of the motion itself clearly indicated
that the motion was filed on behalf of all the
plaintiffs. And this must have been also the
understanding of defendants' counsel himself for
when he filed his comment on the motion, he
furnished copies thereof, not just to the lawyers
who signed the motion, but to all the lawyers of
plaintiffs, to wit: Attys. Jose Diokno, Procopio
Beltran, Rene Sarmiento, Efren Mercado, Augusto
Sanchez, Antonio Rosales, Pedro Efla Jr., Arno
Sanidad, Alexander Padilla, Joker Arroyo, Rene
Saguisag, Ramon Esguerra and Felicitas S.
Aquino.
103
In filing the motion to set aside the resolution of
November 8, 1983, the signing attorneys did so on
behalf of all the plaintiff. They needed no specific
authority to do that. The authority of an attorney to
appear for and in behalf of a party can be
assumed, unless questioned or challenged by the
adverse party or the party concerned, which was
never done in this case. Thus, it was grave abuse
on the part of respondent judge to take it upon
himself to rule that the motion to set aside the
order of November 8, 1953 dismissing the
complaint was filed only by some of the plaintiffs,
when by its very language it was clearly intended
to be filed by and for the benefit of all of them. It is
obvious that the respondent judge took umbrage
under a contrived technicality to declare that the
dismissal of the complaint had already become
final with respect to some of the plaintiffs whose
lawyers did not sign the motion for
reconsideration. Such action tainted with legal
infirmity cannot be sanctioned.
Accordingly, we grant the petition and annul and
set aside the resolution of the respondent court,
dated November 8, 1983, its order dated May 11,
1984 and its resolution dated September 21, 1984.
Let the case be remanded to the respondent court
for further proceedings. With costs against private
respondents.
SO ORDERED.
Fernan, Narvasa, Melencio-Herrera, Cruz, Paras,
Feliciano, Gancayco, Bidin, Sarmiento, Cortes and
Griño-Aquino, JJ., concur.
Gutierrez, Jr., J., concur in the result.
Padilla, J., took no part.
Separate Opinions
TEEHANKEE, C.J., concurring:
The Court's judgment at bar makes clear that all
persons, be they public officers or employees, or
members of the military or police force or private
individuals who directly or indirectly obstruct,
defeat, violate or in any manner impede or impair
the constitutional rights and civil liberties of
another person, stand liable and may be sued in
court for damages as provided in Art. 32 of the Civil
Code.
The case at bar specifically upholds and reinstates
the civil action for damages filed in the court below
by petitioners-plaintiffs for illegal searches
conducted by military personnel and other
violations of their constitutional rights and liberties.
At the same time it rejects the automatic
application of the principle of respondeat
superior or command responsibility that would
hold a superior officer jointly and severally
accountable for damages, including moral and
exemplary, with his subordinates who committed
such transgressions. However, the judgment gives
the caveat that a superior officer must not abdicate
his duty to properly supervise his subordinates for
he runs the risk of being held responsible for gross
negligence and of being held under the cited
provision of the Civil Code as indirectly and
solidarily accountable with the tortfeasor.
The rationale for this rule of law was best
expressed by Brandeis in wise: "In a government
of laws, existence of the government be imperilled
following it fails to observe the law scrupulously.
Our government is the potent omnipresent
teacher. For good or ill, it teaches the whole people
by example. Crime is contagious. If the
government becomes the law breaker, it breeds
contempt for the law, it invites every man to
become a law unto himself, it invites anarchy. To
declare that in the administration of criminal law
the end justifies the means ... would bring terrible
retribution." 1
As the writer stress in Hildawa vs. Enrile 2 Which
Was an action to enjoin the operations of the
dreaded secret marshals during the past regime,
'In a democratic state, you don't stoop to the level
of criminals. If we stoop to what they do, then we're
no better than they ... there would be no difference.
... The Supreme Court stands as the guarantor of
the Constitutional and human rights of all persons
within its jurisdiction and cannot abdicate its basic
role under the Constitution that these rights be
respected and enforced. The spirit and letter of the
Constitution negates as contrary to the basic
precepts of human rights and freedom that a
person's life be snuffed out without due process in
a split second even if he is caught in flagrante
delicto — unless it was caned for as an act of self-
defense by the law agents using reasonable
means to prevent or repel an unlawful aggression
on the part of the deceased.
Needless to say, the criminal acts of the "Sparrow
Units" or death squads of the NPA which have
infutrated the cities and suburbs and performed
their despicable killings of innocent civilians and
military and police officers constitute an equally
perverse violation of the sanctity of human life and
must be severely condemned by all who adhere
tothe Rule of the Law.
104
It need only be pointed out that one of the first acts
of the present government under President
Corazon C. Aquino after her assumption of office
in February, 1986 was to file our government's
ratification and access to all human rights
instruments adopted under the auspices of the
United Nations, declaring thereby the
government's commitment to observe the
precepts of the United Nations Charter and the
Universal Declaration of Human Rights. More than
this, pursuant to our Constitution which the people
decisively ratified on February 2, 1987, the
independent office of the Commission on Human
Rights hats been created and organized with
ample powers to investigate human rights
violations and take remedial measures against all
such violations by the military as well as by the
civilian groups.
Hospitals, having undertaken one of mankind’s
most important and delicate endeavors, must
assume the grave responsibility of pursuing it with
appropriate care. The care and service dispensed
through this high trust, however technical, complex
and esoteric its character may be, must meet
standards of responsibility commensurate with the
undertaking to preserve and protect the health,
and indeed, the very lives of those placed in the
hospital’s keeping.1
Assailed in these three consolidated petitions for
review on certiorari is the Court of Appeals’
Decision2 dated September 6, 1996 in CA-G.R.
CV No. 42062 and CA-G.R. SP No. 32198
affirming with modification the Decision3dated
March 17, 1993 of the Regional Trial Court (RTC),
Branch 96, Quezon City in Civil Case No. Q-43322
and nullifying its Order dated September 21, 1993.

Republic of the Philippines The facts, as culled from the records, are:
SUPREME COURT
Manila On April 4, 1984, Natividad Agana was rushed to
the Medical City General Hospital (Medical City
FIRST DIVISION Hospital) because of difficulty of bowel movement
and bloody anal discharge. After a series of
G.R. No. 126297 January 31, 2007 medical examinations, Dr. Miguel Ampil, petitioner
in G.R. No. 127590, diagnosed her to be suffering
PROFESSIONAL SERVICES, INC., Petitioner, from "cancer of the sigmoid."
vs.
NATIVIDAD and ENRIQUE On April 11, 1984, Dr. Ampil, assisted by the
AGANA, Respondents. medical staff4 of the Medical City Hospital,
performed an anterior resection surgery on
x-----------------------x Natividad. He found that the malignancy in her
sigmoid area had spread on her left ovary,
necessitating the removal of certain portions of it.
G.R. No. 126467 January 31, 2007
Thus, Dr. Ampil obtained the consent of
Natividad’s husband, Enrique Agana, to permit Dr.
NATIVIDAD (Substituted by her children Juan Fuentes, respondent in G.R. No. 126467, to
MARCELINO AGANA III, ENRIQUE AGANA, perform hysterectomy on her.
JR., EMMA AGANA ANDAYA, JESUS AGANA,
and RAYMUND AGANA) and ENRIQUE
After Dr. Fuentes had completed the
AGANA, Petitioners,
hysterectomy, Dr. Ampil took over, completed the
vs.
operation and closed the incision.
JUAN FUENTES, Respondent.
However, the operation appeared to be flawed. In
x- - - - - - - - - - - - - - - - - - - -- - - - x
the corresponding Record of Operation dated April
11, 1984, the attending nurses entered these
G.R. No. 127590 January 31, 2007 remarks:

MIGUEL AMPIL, Petitioner, "sponge count lacking 2

vs.
NATIVIDAD AGANA and ENRIQUE
"announced to surgeon searched (sic) done but to
AGANA, Respondents.
no avail continue for closure."
DECISION
On April 24, 1984, Natividad was released from the
hospital. Her hospital and medical bills, including
SANDOVAL-GUTIERREZ, J.: the doctors’ fees, amounted to P60,000.00.

105
After a couple of days, Natividad complained of
excruciating pain in her anal region. She consulted
both Dr. Ampil and Dr. Fuentes about it. They told
her that the pain was the natural consequence of
the surgery. Dr. Ampil then recommended that she
consult an oncologist to examine the cancerous
nodes which were not removed during the
operation.
On May 9, 1984, Natividad, accompanied by her
husband, went to the United States to seek further
treatment. After four months of consultations and
laboratory examinations, Natividad was told she
was free of cancer. Hence, she was advised to
return to the Philippines.
On August 31, 1984, Natividad flew back to the
Philippines, still suffering from pains. Two weeks
thereafter, her daughter found a piece of gauze
protruding from her vagina. Upon being informed
about it, Dr. Ampil proceeded to her house where
he managed to extract by hand a piece of gauze
measuring 1.5 inches in width. He then assured
her that the pains would soon vanish.
Dr. Ampil’s assurance did not come true. Instead,
the pains intensified, prompting Natividad to seek
treatment at the Polymedic General Hospital.
While confined there, Dr. Ramon Gutierrez
detected the presence of another foreign object in
her vagina -- a foul-smelling gauze measuring 1.5
inches in width which badly infected her vaginal
vault. A recto-vaginal fistula had formed in her
reproductive organs which forced stool to excrete
through the vagina. Another surgical operation
was needed to remedy the damage. Thus, in
October 1984, Natividad underwent another
surgery.
On November 12, 1984, Natividad and her
husband filed with the RTC, Branch 96, Quezon
City a complaint for damages against the
Professional Services, Inc. (PSI), owner of the
Medical City Hospital, Dr. Ampil, and Dr. Fuentes,
docketed as Civil Case No. Q-43322. They alleged
that the latter are liable for negligence for leaving
two pieces of gauze inside Natividad’s body and
malpractice for concealing their acts of negligence.
Meanwhile, Enrique Agana also filed with the
Professional Regulation Commission (PRC) an
administrative complaint for gross negligence and
malpractice against Dr. Ampil and Dr. Fuentes,
docketed as Administrative Case No. 1690. The
PRC Board of Medicine heard the case only with
respect to Dr. Fuentes because it failed to acquire
jurisdiction over Dr. Ampil who was then in the
United States.
On February 16, 1986, pending the outcome of the
above cases, Natividad died and was duly
substituted by her above-named children (the
Aganas).
On March 17, 1993, the RTC rendered its Decision
in favor of the Aganas, finding PSI, Dr. Ampil and
Dr. Fuentes liable for negligence and malpractice,
the decretal part of which reads:
WHEREFORE, judgment is hereby rendered for
the plaintiffs ordering the defendants
PROFESSIONAL SERVICES, INC., DR. MIGUEL
AMPIL and DR. JUAN FUENTES to pay to the
plaintiffs, jointly and severally, except in respect of
the award for exemplary damages and the interest
thereon which are the liabilities of defendants Dr.
Ampil and Dr. Fuentes only, as follows:
1. As actual damages, the following
amounts:
a. The equivalent in Philippine
Currency of the total of US$19,900.00
at the rate of P21.60-US$1.00, as
reimbursement of actual expenses
incurred in the United States of
America;
b. The sum of P4,800.00 as travel
taxes of plaintiffs and their physician
daughter;
c. The total sum of P45,802.50,
representing the cost of hospitalization
at Polymedic Hospital, medical fees,
and cost of the saline solution;
2. As moral damages, the sum of
P2,000,000.00;
3. As exemplary damages, the sum of
P300,000.00;
4. As attorney’s fees, the sum of
P250,000.00;
5. Legal interest on items 1 (a), (b), and (c);
2; and 3 hereinabove, from date of filing of
the complaint until full payment; and
6. Costs of suit.
SO ORDERED.
106
Aggrieved, PSI, Dr. Fuentes and Dr. Ampil
interposed an appeal to the Court of Appeals,
docketed as CA-G.R. CV No. 42062.
Incidentally, on April 3, 1993, the Aganas filed with
the RTC a motion for a partial execution of its
Decision, which was granted in an Order dated
May 11, 1993. Thereafter, the sheriff levied upon
certain properties of Dr. Ampil and sold them for
P451,275.00 and delivered the amount to the
Aganas.
Following their receipt of the money, the Aganas
entered into an agreement with PSI and Dr.
Fuentes to indefinitely suspend any further
execution of the RTC Decision. However, not long
thereafter, the Aganas again filed a motion for an
alias writ of execution against the properties of PSI
and Dr. Fuentes. On September 21, 1993, the
RTC granted the motion and issued the
corresponding writ, prompting Dr. Fuentes to file
with the Court of Appeals a petition for certiorari
and prohibition, with prayer for preliminary
injunction, docketed as CA-G.R. SP No. 32198.
During its pendency, the Court of Appeals issued
a Resolution5 dated October 29, 1993 granting Dr.
Fuentes’ prayer for injunctive relief.
On January 24, 1994, CA-G.R. SP No. 32198 was
consolidated with CA-G.R. CV No. 42062.
Meanwhile, on January 23, 1995, the PRC Board
of Medicine rendered its Decision6 in
Administrative Case No. 1690 dismissing the case
against Dr. Fuentes. The Board held that the
prosecution failed to show that Dr. Fuentes was
the one who left the two pieces of gauze inside
Natividad’s body; and that he concealed such fact
from Natividad.
On September 6, 1996, the Court of Appeals
rendered its Decision jointly disposing of CA-G.R.
CV No. 42062 and CA-G.R. SP No. 32198, thus:
WHEREFORE, except for the modification that the
case against defendant-appellant Dr. Juan
Fuentes is hereby DISMISSED, and with the
pronouncement that defendant-appellant Dr.
Miguel Ampil is liable to reimburse defendant-
appellant Professional Services, Inc., whatever
amount the latter will pay or had paid to the
plaintiffs-appellees, the decision appealed from is
hereby AFFIRMED and the instant appeal
DISMISSED.
Concomitant with the above, the petition for
certiorari and prohibition filed by herein defendant-
appellant Dr. Juan Fuentes in CA-G.R. SP No.
32198 is hereby GRANTED and the challenged
order of the respondent judge dated September
21, 1993, as well as the alias writ of execution
issued pursuant thereto are hereby NULLIFIED
and SET ASIDE. The bond posted by the petitioner
in connection with the writ of preliminary injunction
issued by this Court on November 29, 1993 is
hereby cancelled.
Costs against defendants-appellants Dr. Miguel
Ampil and Professional Services, Inc.
SO ORDERED.
Only Dr. Ampil filed a motion for reconsideration,
but it was denied in a Resolution7 dated December
19, 1996.
Hence, the instant consolidated petitions.
In G.R. No. 126297, PSI alleged in its petition that
the Court of Appeals erred in holding that: (1) it is
estopped from raising the defense that Dr. Ampil
is not its employee; (2) it is solidarily liable with Dr.
Ampil; and (3) it is not entitled to its counterclaim
against the Aganas. PSI contends that Dr. Ampil is
not its employee, but a mere consultant or
independent contractor. As such, he alone should
answer for his negligence.
In G.R. No. 126467, the Aganas maintain that the
Court of Appeals erred in finding that Dr. Fuentes
is not guilty of negligence or medical malpractice,
invoking the doctrine of res ipsa loquitur. They
contend that the pieces of gauze are prima facie
proofs that the operating surgeons have been
negligent.
Finally, in G.R. No. 127590, Dr. Ampil asserts that
the Court of Appeals erred in finding him liable for
negligence and malpractice sans evidence that he
left the two pieces of gauze in Natividad’s vagina.
He pointed to other probable causes, such as: (1)
it was Dr. Fuentes who used gauzes in performing
the hysterectomy; (2) the attending nurses’ failure
to properly count the gauzes used during surgery;
and (3) the medical intervention of the American
doctors who examined Natividad in the United
States of America.
For our resolution are these three vital issues: first,
whether the Court of Appeals erred in holding Dr.
Ampil liable for negligence and malpractice;
second, whether the Court of Appeals erred in
absolving Dr. Fuentes of any liability; and third,
whether PSI may be held solidarily liable for the
negligence of Dr. Ampil.
107
I - G.R. No. 127590
Whether the Court of Appeals Erred in Holding Dr.
Ampil
Liable for Negligence and Malpractice.
Dr. Ampil, in an attempt to absolve himself, gears
the Court’s attention to other possible causes of
Natividad’s detriment. He argues that the Court
should not discount either of the following
possibilities: first, Dr. Fuentes left the gauzes in
Natividad’s body after performing hysterectomy;
second, the attending nurses erred in counting the
gauzes; and third, the American doctors were the
ones who placed the gauzes in Natividad’s body.
Dr. Ampil’s arguments are purely conjectural and
without basis. Records show that he did not
present any evidence to prove that the American
doctors were the ones who put or left the gauzes
in Natividad’s body. Neither did he submit
evidence to rebut the correctness of the record of
operation, particularly the number of gauzes used.
As to the alleged negligence of Dr. Fuentes, we
are mindful that Dr. Ampil examined his (Dr.
Fuentes’) work and found it in order.
The glaring truth is that all the major
circumstances, taken together, as specified by the
Court of Appeals, directly point to Dr. Ampil as the
negligent party, thus:
First, it is not disputed that the surgeons
used gauzes as sponges to control the
bleeding of the patient during the surgical
operation.
Second, immediately after the operation,
the nurses who assisted in the surgery
noted in their report that the ‘sponge count
(was) lacking 2’; that such anomaly was
‘announced to surgeon’ and that a ‘search
was done but to no avail’ prompting Dr.
Ampil to ‘continue for closure’ x x x.
Third, after the operation, two (2) gauzes
were extracted from the same spot of the
body of Mrs. Agana where the surgery was
performed.
An operation requiring the placing of sponges in
the incision is not complete until the sponges are
properly removed, and it is settled that the leaving
of sponges or other foreign substances in the
wound after the incision has been closed is at least
prima facie negligence by the operating
surgeon.8 To put it simply, such act is considered
so inconsistent with due care as to raise an
inference of negligence. There are even legions of
authorities to the effect that such act is negligence
per se.9
Of course, the Court is not blind to the reality that
there are times when danger to a patient’s life
precludes a surgeon from further searching
missing sponges or foreign objects left in the body.
But this does not leave him free from any
obligation. Even if it has been shown that a
surgeon was required by the urgent necessities of
the case to leave a sponge in his patient’s
abdomen, because of the dangers attendant upon
delay, still, it is his legal duty to so inform his
patient within a reasonable time thereafter by
advising her of what he had been compelled to do.
This is in order that she might seek relief from the
effects of the foreign object left in her body as her
condition might permit. The ruling in Smith v.
Zeagler10 is explicit, thus:
The removal of all sponges used is part of a
surgical operation, and when a physician or
surgeon fails to remove a sponge he has placed in
his patient’s body that should be removed as part
of the operation, he thereby leaves his operation
uncompleted and creates a new condition which
imposes upon him the legal duty of calling the new
condition to his patient’s attention, and
endeavoring with the means he has at hand to
minimize and avoid untoward results likely to
ensue therefrom.
Here, Dr. Ampil did not inform Natividad about the
missing two pieces of gauze. Worse, he even
misled her that the pain she was experiencing was
the ordinary consequence of her operation. Had
he been more candid, Natividad could have taken
the immediate and appropriate medical remedy to
remove the gauzes from her body. To our mind,
what was initially an act of negligence by Dr. Ampil
has ripened into a deliberate wrongful act of
deceiving his patient.
This is a clear case of medical malpractice or more
appropriately, medical negligence. To successfully
pursue this kind of case, a patient must only prove
that a health care provider either failed to do
something which a reasonably prudent health care
provider would have done, or that he did
something that a reasonably prudent provider
would not have done; and that failure or action
caused injury to the patient.11 Simply put, the
elements are duty, breach, injury and proximate
causation. Dr, Ampil, as the lead surgeon, had the
duty to remove all foreign objects, such as gauzes,
from Natividad’s body before closure of the
108
incision. When he failed to do so, it was his duty to
inform Natividad about it. Dr. Ampil breached both
duties. Such breach caused injury to Natividad,
necessitating her further examination by American
doctors and another surgery. That Dr. Ampil’s
negligence is the proximate cause12 of Natividad’s
injury could be traced from his act of closing the
incision despite the information given by the
attending nurses that two pieces of gauze were still
missing. That they were later on extracted from
Natividad’s vagina established the causal link
between Dr. Ampil’s negligence and the injury.
And what further aggravated such injury was his
deliberate concealment of the missing gauzes
from the knowledge of Natividad and her family.
II - G.R. No. 126467
Whether the Court of Appeals Erred in Absolving
Dr. Fuentes of any Liability
The Aganas assailed the dismissal by the trial
court of the case against Dr. Fuentes on the
ground that it is contrary to the doctrine of res ipsa
loquitur. According to them, the fact that the two
pieces of gauze were left inside Natividad’s body
is a prima facie evidence of Dr. Fuentes’
negligence.
We are not convinced.
Literally, res ipsa loquitur means "the thing speaks
for itself." It is the rule that the fact of the
occurrence of an injury, taken with the surrounding
circumstances, may permit an inference or raise a
presumption of negligence, or make out a
plaintiff’s prima facie case, and present a question
of fact for defendant to meet with an
explanation.13 Stated differently, where the thing
which caused the injury, without the fault of the
injured, is under the exclusive control of the
defendant and the injury is such that it should not
have occurred if he, having such control used
proper care, it affords reasonable evidence, in the
absence of explanation that the injury arose from
the defendant’s want of care, and the burden of
proof is shifted to him to establish that he has
observed due care and diligence.14
From the foregoing statements of the rule, the
requisites for the applicability of the doctrine of res
ipsa loquitur are: (1) the occurrence of an injury;
(2) the thing which caused the injury was under the
control and management of the defendant; (3) the
occurrence was such that in the ordinary course of
things, would not have happened if those who had
control or management used proper care; and (4)
the absence of explanation by the defendant. Of
the foregoing requisites, the most instrumental is
the "control and management of the thing which
caused the injury."15
We find the element of "control and management
of the thing which caused the injury" to be wanting.
Hence, the doctrine of res ipsa loquitur will not lie.
It was duly established that Dr. Ampil was the lead
surgeon during the operation of Natividad. He
requested the assistance of Dr. Fuentes only to
perform hysterectomy when he (Dr. Ampil) found
that the malignancy in her sigmoid area had
spread to her left ovary. Dr. Fuentes performed the
surgery and thereafter reported and showed his
work to Dr. Ampil. The latter examined it and
finding everything to be in order, allowed Dr.
Fuentes to leave the operating room. Dr. Ampil
then resumed operating on Natividad. He was
about to finish the procedure when the attending
nurses informed him that two pieces of gauze were
missing. A "diligent search" was conducted, but
the misplaced gauzes were not found. Dr. Ampil
then directed that the incision be closed. During
this entire period, Dr. Fuentes was no longer in the
operating room and had, in fact, left the hospital.
Under the "Captain of the Ship" rule, the operating
surgeon is the person in complete charge of the
surgery room and all personnel connected with the
operation. Their duty is to obey his orders.16 As
stated before, Dr. Ampil was the lead surgeon. In
other words, he was the "Captain of the Ship." That
he discharged such role is evident from his
following conduct: (1) calling Dr. Fuentes to
perform a hysterectomy; (2) examining the work of
Dr. Fuentes and finding it in order; (3) granting Dr.
Fuentes’ permission to leave; and (4) ordering the
closure of the incision. To our mind, it was this act
of ordering the closure of the incision
notwithstanding that two pieces of gauze remained
unaccounted for, that caused injury to Natividad’s
body. Clearly, the control and management of the
thing which caused the injury was in the hands of
Dr. Ampil, not Dr. Fuentes.
In this jurisdiction, res ipsa loquitur is not a rule of
substantive law, hence, does not per se create or
constitute an independent or separate ground of
liability, being a mere evidentiary rule.17 In other
words, mere invocation and application of the
doctrine does not dispense with the requirement of
proof of negligence. Here, the negligence was
proven to have been committed by Dr. Ampil and
not by Dr. Fuentes.
III - G.R. No. 126297
109
Whether PSI Is Liable for the Negligence of Dr.
Ampil
The third issue necessitates a glimpse at the
historical development of hospitals and the
resulting theories concerning their liability for the
negligence of physicians.
Until the mid-nineteenth century, hospitals were
generally charitable institutions, providing medical
services to the lowest classes of society, without
regard for a patient’s ability to pay.18 Those who
could afford medical treatment were usually
treated at home by their doctors.19 However, the
days of house calls and philanthropic health care
are over. The modern health care industry
continues to distance itself from its charitable past
and has experienced a significant conversion from
a not-for-profit health care to for-profit hospital
businesses. Consequently, significant changes in
health law have accompanied the business-
related changes in the hospital industry. One
important legal change is an increase in hospital
liability for medical malpractice. Many courts now
allow claims for hospital vicarious liability under
the theories of respondeat superior, apparent
authority, ostensible authority, or agency by
estoppel. 20
In this jurisdiction, the statute governing liability for
negligent acts is Article 2176 of the Civil Code,
which reads:
Art. 2176. Whoever by act or omission causes
damage to another, there being fault or
negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called
a quasi-delict and is governed by the provisions of
this Chapter.
A derivative of this provision is Article 2180, the
rule governing vicarious liability under the doctrine
of respondeat superior, thus:
ART. 2180. The obligation imposed by Article
2176 is demandable not only for one’s own acts or
omissions, but also for those of persons for whom
one is responsible.
x x x
x x x
The owners and managers of an establishment or
enterprise are likewise responsible for damages
caused by their employees in the service of the
branches in which the latter are employed or on
the occasion of their functions.
Employers shall be liable for the damages caused
by their employees and household helpers acting
within the scope of their assigned tasks even
though the former are not engaged in any business
or industry.
x x x
x x x
The responsibility treated of in this article shall
cease when the persons herein mentioned prove
that they observed all the diligence of a good father
of a family to prevent damage.
A prominent civilist commented that professionals
engaged by an employer, such as physicians,
dentists, and pharmacists, are not "employees"
under this article because the manner in which
they perform their work is not within the control of
the latter (employer). In other words, professionals
are considered personally liable for the fault or
negligence they commit in the discharge of their
duties, and their employer cannot be held liable for
such fault or negligence. In the context of the
present case, "a hospital cannot be held liable for
the fault or negligence of a physician or surgeon in
the treatment or operation of patients."21
The foregoing view is grounded on the traditional
notion that the professional status and the very
nature of the physician’s calling preclude him from
being classed as an agent or employee of a
hospital, whenever he acts in a professional
capacity.22 It has been said that medical practice
strictly involves highly developed and specialized
knowledge,23 such that physicians are generally
free to exercise their own skill and judgment in
rendering medical services sans
interference.24 Hence, when a doctor practices
medicine in a hospital setting, the hospital and its
employees are deemed to subserve him in his
ministrations to the patient and his actions are of
his own responsibility.25
The case of Schloendorff v. Society of New York
Hospital26 was then considered an authority for this
view. The "Schloendorff doctrine" regards a
physician, even if employed by a hospital, as an
independent contractor because of the skill he
exercises and the lack of control exerted over his
work. Under this doctrine, hospitals are exempt
from the application of the respondeat superior
principle for fault or negligence committed by
physicians in the discharge of their profession.
However, the efficacy of the foregoing doctrine has
weakened with the significant developments in
medical care. Courts came to realize that modern
110
hospitals are increasingly taking active role in
supplying and regulating medical care to patients.
No longer were a hospital’s functions limited to
furnishing room, food, facilities for treatment and
operation, and attendants for its patients. Thus, in
Bing v. Thunig,27 the New York Court of Appeals
deviated from the Schloendorff doctrine, noting
that modern hospitals actually do far more than
provide facilities for treatment. Rather, they
regularly employ, on a salaried basis, a large staff
of physicians, interns, nurses, administrative and
manual workers. They charge patients for medical
care and treatment, even collecting for such
services through legal action, if necessary. The
court then concluded that there is no reason to
exempt hospitals from the universal rule of
respondeat superior.
In our shores, the nature of the relationship
between the hospital and the physicians is
rendered inconsequential in view of our
categorical pronouncement in Ramos v. Court of
Appeals28 that for purposes of apportioning
responsibility in medical negligence cases, an
employer-employee relationship in effect exists
between hospitals and their attending and visiting
physicians. This Court held:
"We now discuss the responsibility of the hospital
in this particular incident. The unique practice
(among private hospitals) of filling up specialist
staff with attending and visiting "consultants," who
are allegedly not hospital employees, presents
problems in apportioning responsibility for
negligence in medical malpractice cases.
However, the difficulty is more apparent than real.
In the first place, hospitals exercise significant
control in the hiring and firing of consultants and in
the conduct of their work within the hospital
premises. Doctors who apply for ‘consultant’ slots,
visiting or attending, are required to submit proof
of completion of residency, their educational
qualifications, generally, evidence of accreditation
by the appropriate board (diplomate), evidence of
fellowship in most cases, and references. These
requirements are carefully scrutinized by members
of the hospital administration or by a review
committee set up by the hospital who either accept
or reject the application. x x x.
After a physician is accepted, either as a visiting or
attending consultant, he is normally required to
attend clinico-pathological conferences, conduct
bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and
perform other tasks and responsibilities, for the
privilege of being able to maintain a clinic in the
hospital, and/or for the privilege of admitting
patients into the hospital. In addition to these, the
physician’s performance as a specialist is
generally evaluated by a peer review committee
on the basis of mortality and morbidity statistics,
and feedback from patients, nurses, interns and
residents. A consultant remiss in his duties, or a
consultant who regularly falls short of the minimum
standards acceptable to the hospital or its peer
review committee, is normally politely terminated.
In other words, private hospitals, hire, fire and
exercise real control over their attending and
visiting ‘consultant’ staff. While ‘consultants’ are
not, technically employees, x x x, the control
exercised, the hiring, and the right to terminate
consultants all fulfill the important hallmarks of an
employer-employee relationship, with the
exception of the payment of wages. In assessing
whether such a relationship in fact exists, the
control test is determining. Accordingly, on the
basis of the foregoing, we rule that for the purpose
of allocating responsibility in medical negligence
cases, an employer-employee relationship in
effect exists between hospitals and their attending
and visiting physicians. "
But the Ramos pronouncement is not our only
basis in sustaining PSI’s liability. Its liability is also
anchored upon the agency principle of apparent
authority or agency by estoppel and the doctrine of
corporate negligence which have gained
acceptance in the determination of a hospital’s
liability for negligent acts of health professionals.
The present case serves as a perfect platform to
test the applicability of these doctrines, thus,
enriching our jurisprudence.
Apparent authority, or what is sometimes referred
to as the "holding out" theory, or doctrine of
ostensible agency or agency by estoppel,29 has its
origin from the law of agency. It imposes liability,
not as the result of the reality of a contractual
relationship, but rather because of the actions of a
principal or an employer in somehow misleading
the public into believing that the relationship or the
authority exists.30 The concept is essentially one of
estoppel and has been explained in this manner:
"The principal is bound by the acts of his agent with
the apparent authority which he knowingly permits
the agent to assume, or which he holds the agent
out to the public as possessing. The question in
every case is whether the principal has by his
voluntary act placed the agent in such a situation
that a person of ordinary prudence, conversant
with business usages and the nature of the
particular business, is justified in presuming that
111
such agent has authority to perform the particular
act in question.31
The applicability of apparent authority in the field
of hospital liability was upheld long time ago in
Irving v. Doctor Hospital of Lake Worth,
Inc.32 There, it was explicitly stated that "there
does not appear to be any rational basis for
excluding the concept of apparent authority from
the field of hospital liability." Thus, in cases where
it can be shown that a hospital, by its actions, has
held out a particular physician as its agent and/or
employee and that a patient has accepted
treatment from that physician in the reasonable
belief that it is being rendered in behalf of the
hospital, then the hospital will be liable for the
physician’s negligence.
Our jurisdiction recognizes the concept of an
agency by implication or estoppel. Article 1869 of
the Civil Code reads:
ART. 1869. Agency may be express, or implied
from the acts of the principal, from his silence or
lack of action, or his failure to repudiate the
agency, knowing that another person is acting on
his behalf without authority.
In this case, PSI publicly displays in the lobby of
the Medical City Hospital the names and
specializations of the physicians associated or
accredited by it, including those of Dr. Ampil and
Dr. Fuentes. We concur with the Court of Appeals’
conclusion that it "is now estopped from passing
all the blame to the physicians whose names it
proudly paraded in the public directory leading the
public to believe that it vouched for their skill and
competence." Indeed, PSI’s act is tantamount to
holding out to the public that Medical City Hospital,
through its accredited physicians, offers quality
health care services. By accrediting Dr. Ampil and
Dr. Fuentes and publicly advertising their
qualifications, the hospital created the impression
that they were its agents, authorized to perform
medical or surgical services for its patients. As
expected, these patients, Natividad being one of
them, accepted the services on the reasonable
belief that such were being rendered by the
hospital or its employees, agents, or servants. The
trial court correctly pointed out:
x x x regardless of the education and status in life
of the patient, he ought not be burdened with the
defense of absence of employer-employee
relationship between the hospital and the
independent physician whose name and
competence are certainly certified to the general
public by the hospital’s act of listing him and his
specialty in its lobby directory, as in the case
herein. The high costs of today’s medical and
health care should at least exact on the hospital
greater, if not broader, legal responsibility for the
conduct of treatment and surgery within its facility
by its accredited physician or surgeon, regardless
of whether he is independent or employed."33
The wisdom of the foregoing ratiocination is easy
to discern. Corporate entities, like PSI, are capable
of acting only through other individuals, such as
physicians. If these accredited physicians do their
job well, the hospital succeeds in its mission of
offering quality medical services and thus profits
financially. Logically, where negligence mars the
quality of its services, the hospital should not be
allowed to escape liability for the acts of its
ostensible agents.
We now proceed to the doctrine of corporate
negligence or corporate responsibility.
One allegation in the complaint in Civil Case No.
Q-43332 for negligence and malpractice is that
PSI as owner, operator and manager of Medical
City Hospital, "did not perform the necessary
supervision nor exercise diligent efforts in the
supervision of Drs. Ampil and Fuentes and its
nursing staff, resident doctors, and medical interns
who assisted Drs. Ampil and Fuentes in the
performance of their duties as
surgeons."34 Premised on the doctrine of corporate
negligence, the trial court held that PSI is directly
liable for such breach of duty.
We agree with the trial court.
Recent years have seen the doctrine of corporate
negligence as the judicial answer to the problem of
allocating hospital’s liability for the negligent acts
of health practitioners, absent facts to support the
application of respondeat superior or apparent
authority. Its formulation proceeds from the
judiciary’s acknowledgment that in these modern
times, the duty of providing quality medical service
is no longer the sole prerogative and responsibility
of the physician. The modern hospitals have
changed structure. Hospitals now tend to organize
a highly professional medical staff whose
competence and performance need to be
monitored by the hospitals commensurate with
their inherent responsibility to provide quality
medical care.35
The doctrine has its genesis in Darling v.
Charleston Community Hospital.36 There, the
Supreme Court of Illinois held that "the jury could
have found a hospital negligent, inter alia, in failing
112
to have a sufficient number of trained nurses
attending the patient; failing to require a
consultation with or examination by members of
the hospital staff; and failing to review the
treatment rendered to the patient." On the basis of
Darling, other jurisdictions held that a hospital’s
corporate negligence extends to permitting a
physician known to be incompetent to practice at
the hospital.37 With the passage of time, more
duties were expected from hospitals, among them:
(1) the use of reasonable care in the maintenance
of safe and adequate facilities and equipment; (2)
the selection and retention of competent
physicians; (3) the overseeing or supervision of all
persons who practice medicine within its walls;
and (4) the formulation, adoption and enforcement
of adequate rules and policies that ensure quality
care for its patients.38 Thus, in Tucson Medical
Center, Inc. v. Misevich,39 it was held that a
hospital, following the doctrine of corporate
responsibility, has the duty to see that it meets the
standards of responsibilities for the care of
patients. Such duty includes the proper
supervision of the members of its medical staff.
And in Bost v. Riley,40 the court concluded that a
patient who enters a hospital does so with the
reasonable expectation that it will attempt to cure
him. The hospital accordingly has the duty to make
a reasonable effort to monitor and oversee the
treatment prescribed and administered by the
physicians practicing in its premises.
In the present case, it was duly established that
PSI operates the Medical City Hospital for the
purpose and under the concept of providing
comprehensive medical services to the public.
Accordingly, it has the duty to exercise reasonable
care to protect from harm all patients admitted into
its facility for medical treatment. Unfortunately, PSI
failed to perform such duty. The findings of the trial
court are convincing, thus:
x x x PSI’s liability is traceable to its failure to
conduct an investigation of the matter reported in
the nota bene of the count nurse. Such failure
established PSI’s part in the dark conspiracy of
silence and concealment about the gauzes.
Ethical considerations, if not also legal, dictated
the holding of an immediate inquiry into the events,
if not for the benefit of the patient to whom the duty
is primarily owed, then in the interest of arriving at
the truth. The Court cannot accept that the medical
and the healing professions, through their
members like defendant surgeons, and their
institutions like PSI’s hospital facility, can callously
turn their backs on and disregard even a mere
probability of mistake or negligence by refusing or
failing to investigate a report of such seriousness
as the one in Natividad’s case.
It is worthy to note that Dr. Ampil and Dr. Fuentes
operated on Natividad with the assistance of the
Medical City Hospital’s staff, composed of resident
doctors, nurses, and interns. As such, it is
reasonable to conclude that PSI, as the operator
of the hospital, has actual or constructive
knowledge of the procedures carried out,
particularly the report of the attending nurses that
the two pieces of gauze were missing. In Fridena
v. Evans,41 it was held that a corporation is bound
by the knowledge acquired by or notice given to its
agents or officers within the scope of their authority
and in reference to a matter to which their authority
extends. This means that the knowledge of any of
the staff of Medical City Hospital constitutes
knowledge of PSI. Now, the failure of PSI, despite
the attending nurses’ report, to investigate and
inform Natividad regarding the missing gauzes
amounts to callous negligence. Not only did PSI
breach its duties to oversee or supervise all
persons who practice medicine within its walls, it
also failed to take an active step in fixing the
negligence committed. This renders PSI, not only
vicariously liable for the negligence of Dr. Ampil
under Article 2180 of the Civil Code, but also
directly liable for its own negligence under Article
2176. In Fridena, the Supreme Court of Arizona
held:
x x x In recent years, however, the duty of care
owed to the patient by the hospital has expanded.
The emerging trend is to hold the hospital
responsible where the hospital has failed to
monitor and review medical services being
provided within its walls. See Kahn Hospital
Malpractice Prevention, 27 De Paul . Rev. 23
(1977).
Among the cases indicative of the ‘emerging trend’
is Purcell v. Zimbelman, 18 Ariz. App. 75,500 P. 2d
335 (1972). In Purcell, the hospital argued that it
could not be held liable for the malpractice of a
medical practitioner because he was an
independent contractor within the hospital. The
Court of Appeals pointed out that the hospital had
created a professional staff whose competence
and performance was to be monitored and
reviewed by the governing body of the hospital,
and the court held that a hospital would be
negligent where it had knowledge or reason to
believe that a doctor using the facilities was
employing a method of treatment or care which fell
below the recognized standard of care.
Subsequent to the Purcell decision, the Arizona
Court of Appeals held that a hospital has certain
inherent responsibilities regarding the quality of
medical care furnished to patients within its walls
and it must meet the standards of responsibility
113
commensurate with this undertaking. Beeck v. REYNATO S. PUNO
Tucson General Hospital, 18 Ariz. App. 165, 500 Chief Justice
P. 2d 1153 (1972). This court has confirmed the Chairperson
rulings of the Court of Appeals that a hospital has
the duty of supervising the competence of the RENATO C. ADOLFO S.
doctors on its staff. x x x. CORONA AZCUNA
Associate Justice Asscociate Justice
x x x
x x x
(No Part)
In the amended complaint, the plaintiffs did plead CANCIO C. GARCIA
that the operation was performed at the hospital Associate Justice
with its knowledge, aid, and assistance, and that
the negligence of the defendants was the
CERTIFICATION
proximate cause of the patient’s injuries. We find
that such general allegations of negligence, along
with the evidence produced at the trial of this case, Pursuant to Article VIII, Section 13 of the
are sufficient to support the hospital’s liability Constitution, it is hereby certified that the
based on the theory of negligent supervision." conclusions in the above Decision were reached in
consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
Anent the corollary issue of whether PSI is
solidarily liable with Dr. Ampil for damages, let it be
emphasized that PSI, apart from a general denial REYNATO S. PUNO
of its responsibility, failed to adduce evidence Chief Justice
showing that it exercised the diligence of a good
father of a family in the accreditation and Republic of the Philippines
supervision of the latter. In neglecting to offer such SUPREME COURT
proof, PSI failed to discharge its burden under the Manila
last paragraph of Article 2180 cited earlier, and,
therefore, must be adjudged solidarily liable with FIRST DIVISION
Dr. Ampil. Moreover, as we have discussed, PSI is
also directly liable to the Aganas. G.R. No. 111692 February 9, 1996

One final word. Once a physician undertakes the ALEJANDRO FUENTES, JR., petitioner,
treatment and care of a patient, the law imposes vs.
on him certain obligations. In order to escape COURT OF APPEALS and PEOPLE OF THE
liability, he must possess that reasonable degree PHILIPPINES, respondents.
of learning, skill and experience required by his
profession. At the same time, he must apply DECISION
reasonable care and diligence in the exercise of
his skill and the application of his knowledge, and
exert his best judgment. BELLOSILLO, J.:

WHEREFORE, we DENY all the petitions and Still professing innocence and insisting that he is a
AFFIRM the challenged Decision of the Court of victim of mistaken identity, petitioner Alejandro
Appeals in CA-G.R. CV No. 42062 and CA-G.R. Fuentes, Jr., seeks reversal of the decision of the
SP No. 32198. Court of Appeals affirming his conviction for
murder.1
Costs against petitioners PSI and Dr. Miguel
Ampil. At four o'clock in the morning of 24 June 1989
Julieto Malaspina together with Godofredo
Llames, Honorio Osok and Alberto Toling, was at
SO ORDERED. a benefit dance at Dump Site, Tudela, Trento,
Agusan del Sur. Petitioner called Malaspina and
ANGELINA SANDOVAL-GUTIERREZ placed his right arm on the shoulder of the latter
Associate Justice saying, "Before, I saw you with a long hair but now
you have a short hair."2 Suddenly petitioner
WE CONCUR: stabbed Malaspina in the abdomen with a hunting
knife. Malaspina fell to the ground and his

114
companions rushed to his side. Petitioner fled.
Before the victim succumbed to the gaping wound
on his abdomen he muttered that Alejandro
Fuentes, Jr., stabbed him.3
Dr. Porfirio L. Salubre, the Rural Health Physician
who autopsied the cadaver of Julieto Malaspina on
24 July 1989, reported that death was due to "stab
wound at left lumbar region 1-1/2 in. in length with
extracavitation of the small and large intestines."4
Petitioner claims on the other hand that it was his
cousin Zoilo Fuentes, Jr., alias "Jonie" who knifed
Malaspina; that when the victim was killed he was
conversing with him; that he was compelled to run
away when he heard that somebody with a bolo
and spear would "kill all those from San Isidro"
because "Jonie," the killer, was from that place;
that since he was also from San Isidro he sought
refuge in his brother's house where he met "Jonie;"
that "Jonie" admitted spontaneously that he
stabbed Malaspina because after a boxing match
before the latter untied his gloves and punched
him; that as there were many persons milling
around the house "Jonie" jumped out and escaped
through the window; that he was arrested at eight
o'clock in the morning of 24 June 1989 while he
was in a store in the barangay.5
The Regional Trial Court of Prosperidad, Agusan
del Sur, found petitioner guilty of murder qualified
by treachery and imposed on him an indeterminate
prison term of ten (10) years and one (1) day
of prison mayor as minimum to seventeen (17)
years and four (4) months of reclusion temporal as
maximum, to indemnify the heirs of the victim
Julieto Malaspina the amount of P50,000.00 and
to pay P8,300.00 as actual damages plus costs.6
The Court of Appeals affirmed the judgment of the
trial court; hence, this petition for review.
Petitioner contends that the appellate court erred
when it held that petitioner was positively and
categorically identified as the killer of Malaspina, in
affirming the judgment of conviction and in holding
petitioner liable for damages to the heirs of the
victim.
Petitioner points to an alleged inconsistency
between the testimonies of prosecution witnesses
Alberto Toling and Honorio Osok to the effect that
they saw petitioner stab Malaspina on the right
lumbar region, and the testimony of the attending
physician that the victim was stabbed on the left
lumbar region.
This discrepancy is inconsequential. What is
material is that Malaspina was stabbed to death
and that three (3) prosecution witnesses positively
identified petitioner as the knife wielder. It must be
stressed that these witnesses had known
petitioner for quite some time and never had any
personal misunderstanding nor altercation with the
latter as to create any suspicion that they were
impelled by ill motives to falsely implicate him.
That it was another person who committed the
offense is too incredible. No less than petitioner's
own witness, Nerio Biscocho who claimed he also
saw the killing, testified that Alejandro Fuentes, Jr.,
the petitioner, and "Jonie" Fuentes are one and the
same person. Thus -
COURT:
Q Who is this Joni Fuentes and
Alejandro Fuentes?
A That Joni Fuentes is the same of that
or the accused Alejandro Fuentes. I do not
know his real name but he is called as
Joni, sir, . . .7
On cross-examination witness Biscocho further
admitted that he himself would call petitioner
Alejandro Fuentes, Jr., as "Joni" or "Jonie"
Fuentes, as some of his friends did, but victim
Malaspina occasionally called petitioner "Junior".8
Petitioner would make much of the alleged
confession of Zoilo Fuentes, Jr., since it is a
declaration against penal interest and therefore an
exception to the hearsay rule. The so-called
confession of Zoilo was allegedly given to
Felicisimo Fuentes, the uncle of petitioner and
Zoilo, who in turn relayed the matter to P/Sgt.
Benjamin Conde, Jr. Felicisimo testified that on 24
June 1989 while he was at Barangay San Isidro,
Zoilo Fuentes, Jr., confessed that he killed
Malaspina in "retaliation;" that he even showed
him the knife he used and asked his help in finding
a lawyer, in securing bail and, if possible, in
working out a settlement with the relatives of the
deceased. The following day however he learned
that the self-confessed killer was gone and that
petitioner had been arrested for a crime he did not
commit.9
For his part, Station Commander P/Sgt. Conde,
Jr., testified that after the criminal information for
murder was filed on 26 July 1989, petitioner met
Felicisimo who informed him of the disclosure by
Zoilo. Conde then advised Felicisimo that if it was
true that it was Zoilo who fatally stabbed Malaspina
115
Felicisimo must persuade Zoilo to surrender.
Conde then personally went to Barangay San
Isidro to investigate. There he was told by the
townsfolk that Zoilo had already fled.10
One of the recognized exceptions to the hearsay
rule is that pertaining to declarations made against
interest. Sec. 38 of Rule 130 of the Rules of Court
provides that "(t)he declaration made by a person
deceased, or unable to testify, against the interest
of the declarant, if the fact asserted in the
declaration was at the time it was made so far
contrary to declarant's own interest, that a
reasonable man in his position would not have
made the declaration unless he believed it to be
true, may be received in evidence against himself
or his successors in interest and against third
persons." The admissibility in evidence of such
declaration is grounded on necessity and
trustworthiness.11
There are three (3) essential requisites for the
admissibility of a declaration against interest: (a)
the declarant must not be available to testify; (b)
the declaration must concern a fact cognizable by
the declarant; and (c) the circumstances must
render it improbable that a motive to falsify existed.
In the instant case, we find that the declaration
particularly against penal interest attributed to
Zoilo Fuentes Jr. is not admissible in evidence as
an exception to the hearsay rule. We are not
unaware of People v. Toledo, 12 a 1928 case,
where Justice Malcolm writing for the Court
endeavored to reexamine the declaration of third
parties made contrary to their penal interest. In that
case, the protagonists Holgado and Morales
engaged in a bolo duel. Morales was killed almost
instantly. Holgado who was seriously wounded
gave a sworn statement (Exh. 1) before the
municipal president declaring that when he and
Morales fought there was nobody else present.
One (1) month later Holgado died from his
wounds. While the Court was agreed that Toledo,
who reportedly intervened in the fight and dealt the
mortal blow, should be exonerated on reasonable
doubt, the members did not reach an accord on
the admissibility of Exh. 1. One group would totally
disregard Exh. 1 since there was ample
testimonial evidence to support an acquittal. The
second group considered Exh. 1 as part of the res
gestae as it was made on the same morning when
the fight occurred. A third group, to which Justice
Malcolm belonged, opined that the court below
erred in not admitting Exh. 1 as the statement of a
fact against penal interest.
For all its attempt to demonstrate the arbitrariness
behind the rejection in certain cases of
declarations against penal interest,
the Toledo case cannot be applied in the instant
case which is remarkably different. Consider this
factual scenario: the alleged declarant Zoilo
Fuentes Jr., a cousin of accused-appellant,
verbally admitted to the latter, and later to their
common uncle Felicisimo Fuentes, that he (Zoilo)
killed the victim because of a grudge, after which
he disappeared. One striking feature that militates
against the acceptance of such a statement is its
patent untrustworthiness. Zoilo who is related to
accused-appellant had every motive to
prevaricate. The same can be said of accused-
appellant and his uncle Felicisimo. Secondly, we
need not resort to legal rhetorics to find that the
admission of such a statement may likewise be,
according to Wigmore, "shocking to the sense of
justice." 13 Let us assume that the trial court did
admit the statement of Zoilo and on that basis
acquitted accused-appellant. Let us assume
further that Zoilo was subsequently captured and
upon being confronted with his admission of guilt
readily repudiated the same. There is nothing,
absolutely nothing that can bind Zoilo legally to
that statement.
But more importantly, the far weightier reason why
the admission against penal interest cannot be
accepted in the instant case is that the declarant is
not "unable to testify." There is no showing that
Zoilo is either dead, mentally incapacitated or
physically incompetent which Sec. 38 obviously
contemplates. His mere absence from the
jurisdiction does not make him ipso
facto unavailable under this rule. 14 For it is
incumbent upon the defense to produce each and
every piece of evidence that can break the
prosecution and assure the acquittal of the
accused. Other than the gratuitous statements of
accused-appellant and his uncle to the effect that
Zoilo admitted having killed Malaspina, the records
show that the defense did not exert any serious
effort to produce Zoilo as a witness. Lest we be
misunderstood, the Court is always for the
admission of evidence that would let an innocent
declaration of guilt by the real culprit. But this can
be open to abuse, as when the extrajudicial
statement is not even authenticated thus
increasing the probability of its fabrication; it is
made to persons who have every reason to lie and
falsify; and it is not altogether clear that the
declarant himself is unable to testify. Thus, for this
case at least, exclusion is the prudent recourse as
explained in Toledo -
The purpose of all evidence is to get at the
truth. The reason for the hearsay rule is
116
 that the extrajudicial and unsworn
statement of another is not the best
method of serving this purpose. In other
words, the great possibility of the
fabrication of falsehoods, and the inability
to prove their untruth, requires that the
doors be closed to such evidence.15
The Court of Appeals as well as the trial court
correctly determined the crime to be murder
qualified by treachery. The suddenness of the
attack, without any provocation from the
unsuspecting victim, made the stabbing of
Malaspina treacherous.16 However, the court a
quo erred in imposing an indeterminate prison
term of ten (10) years and one (1) day of prison
mayor as minimum to seventeen (17) years and
four (4) months of reclusion temporal as
maximum. Murder under Art. 248 of The Revised
Penal Code is punishable by reclusion temporal in
its maximum period to death. Since aside from
treachery qualifying the crime to murder there is no
other modifying circumstance proved, the medium
period of the penalty, i.e. reclusion perpetua,
should have been imposed on petitioner.17
Petitioner maintains that assuming that he
committed the crime it is error to hold him
answerable for P8,300.00 as actual damages on
the basis of the mere testimony of the victim's
sister, Angelina Serrano, without any tangible
document to support such claim. This is a valid
point. in crimes and quasi-delicts, the defendant is
liable for all damages which are the natural and
probable consequences of the act or omission
complained of.18 To seek recovery for actual
damages it is essential that the injured party
proves the actual amount of loss with reasonable
degree of certainty premised upon competent
proof and on the best evidence available. 19 Courts
cannot simply, rely on speculation, conjecture or
guesswork in determining the fact and amount of
damages.20
The award by the court a quo of P8,300.00 as
actual damages is not supported by the evidence
on record. We have only the testimony of the
victim's elder sister stating that she incurred
expenses of P8,300.00 in connection with the
death of Malaspina. 21 However, no proof of the
actual damages was ever presented in court. Of
the expenses alleged to have been incurred, the
Court can only give credence to those supported
by receipts and which appear to have been
genuinely expended in connection with the death
of the victim. Since the actual amount was not
substantiated, the same cannot be granted.22
WHEREFORE, the judgment appealed from
finding petitioner ALEJANDRO FUENTES JR.
guilty of MURDER and directing him to indemnify
the heirs of Julieto Malaspina in the amount of
P50,000.00 plus costs is AFFIRMED with the
modification that the penalty imposed should be as
it is corrected to reclusion perpetua, and the award
of actual damages is deleted.
SO ORDERED.
Padilla, Vitug, Kapunan and Hermosisima, Jr.,
JJ., concur.
THIRD DIVISION
G.R. No. 143819 January 29, 2002
PEOPLE OF THE PHILIPPINES, appellee,
vs.
GERRY CUENCA y MEDRANO, JACKSON
CUENCA (at large), CRISANTO AGON y
MAGPANTAY, and BERNIE AGON (at
large), accused,
GERRY CUENCA y MEDRANO and CRISANTO
AGON y MAGPANTAY, appellants.
PANGANIBAN, J.:
The testimony of a single eyewitness, if credible
and positive, is sufficient to support a conviction for
murder. Truth is established by the quality, not
necessarily by the quantity, of the evidence.
The Case
Gerry Cuenca and Crisanto Agon1 appeal the
February 7, 2000 Decision2 of the Regional Trial
Court (RTC) of Lipa City (Branch 12) in Criminal
Case No. 0132-98, which found them guilty of
murder beyond reasonable doubt.
The RTC disposed of the case as follows:
"WHEREFORE, the Court finds the
accused GERRY CUENCA and
CRISANTO AGON, guilty beyond
reasonable doubt, both as principals by
direct participation for having conspired
and confederated with one another in the
commission of the crime of [m]urder, as
alleged in the Information dated March 27,
117
 1998, and defined and penalized under
Article 248 of the Revised Penal Code, as
amended by Republic Act 7659 and
sentences each of them to suffer the
penalty of RECLUSION PERPETUA, to
pay the heirs of Wilfredo Castillo the sum
of ₱50,000.00 as indemnity for his death,
the sum of ₱38,800.00, as actual
damages, the sum of ₱4,800,000.00 for
loss of earning capacity, the sum of
₱20,000.00, as moral damages and to pay
their proportionate share of the costs.
"The period during which both accused are
under preventive imprisonment shall be
deducted from their sentence.
"Finally, let also warrants of arrest be
issued against the accused Jackson
Cuenca and Bernardo 'Bernie' Agon for
their immediate apprehension."3
On March 17, 1998, Lipa City Assistant City
Prosecutor Mario G. Mayuga filed the Information
charging appellants and their co-accused as
follows:
"That on or about the 14th day of February,
1998 at about 9:30 o'clock in the evening,
at Barangay Tambo, Lipa City, Philippines
and within the jurisdiction of this Honorable
Court, the above-named accused, then
armed with bladed/pointed and hard
instruments, conspiring and confederating
together, acting in common accord and
mutually aiding one another, with intent to
kill, with treachery and grave abuse of
superior strength and taking advantage of
nighttime, did then and there wilfully,
unlawfully and feloniously attack, assault,
beat and stab with the use of said
bladed/pointed and hard instruments,
suddenly and without warning, one
Wilfredo Castillo, thereby inflicting upon
the latter stab wounds, which directly
caused his death."4
When arraigned on April 27, 1998, appellants --
with the assistance of their lawyers -- entered a
plea of not guilty.5Because their co-accused were
at large, trial on the merits proceeded only as
against them.
The Facts
Version of the Prosecution
In its Brief,6 the Office of the Solicitor General
summarized the prosecution's version of the facts
as follows:
"On February 14, 1998, around 9:30 in the
evening, while lying down with his wife and
family in his house at Module Subdivision,
Barangay Tambo, Lipa City, Batangas,
Marcial Morillo7 heard a commotion taking
place outside his house. Dogs were
barking loudly, so he decided to go out of
the house to see what was happening
outside. He then saw a man being mauled
and beaten by four (4) persons. Upon
seeing the incident, he hid himself behind
a PLDT telephone post. From a distance
of about ten (10) meters, he recognized
the four (4) assailants as Gerry Cuenca,
Jackson Cuenca, Crisanto Agon and
Bernie Agon, while the person being
mauled was Wilfredo 'Edok' Castillo.
Marcial knew the four assailants and the
victim for eight (8) years since they were
all neighbors, Gerry and Jackson being
brothers and Crisanto and Bernie being
father and son. He witnessed Crisanto
hold Edok's left hand while Bernie held his
right hand. Gerry was at Edok's front and
to the right while Jackson was at Edok's
front and to the left and both were beating
Edok continuously. Gerry and Jackson
each used a piece of wood in hitting Edok
several times on the face, head, chest and
other parts of his body. Edok tried to
struggle but his efforts proved futile. Edok
then gave in, stooped down and eventually
lost consciousness (Lumug[m]ok na po
siya). The four (4) assailants then carried
Edok's body with one holding on to his
right arm, the other one x x x his left arm
and the other two each held the right and
left leg[s] of Edok towards the direction of
Calabarzon Highway.
"Thereafter, Marcial returned to his house
but did not tell his wife about the incident
because she was 'nerbiyosa'. He did not
want the members of his family to get
involved in the incident because he feared
for their safety. The mauling incident
lasted approximately twenty (20) minutes.
The place where the incident happened
was illuminated by the light coming from
the moon and the electric bulb at the
electric post which was at the top of the
roof of a house near the place of the
incident.
118
"The following morning, February 15,
1998, Marcial met Feliciano Castillo,
Edok's brother, who told him that they
were looking for Edok. Marcial did not
mention to Feliciano that he had witnessed
the mauling of Edok because he was afraid
that he might be implicated and involved in
the incident.
"On February 15, 1998, around 2:30 in the
afternoon, a neighbor named Silo passed
by Marcial's house and told him that they
were looking for Edok's body. Marcial
joined in the search in the forest for about
one hour and then he went home.
"About 4 o'clock in the afternoon of
February 15, 1998, Feliciano dropped by
the house of Marcial and said that Edok's
body had been found and borrowed
Marcial's flashlight in order to help in the
recovery of Edok's body which was found
inside a well in the forest. The body was
retrieved from the well which was about
fifteen (15) meters deep. There were blood
stains around the well. Coconut trees
surrounded the area. The body was
recovered between Masagana Subdivision
and Adelina Subdivision, which was a
forested area and about one-half (1/2)
kilometer from where the mauling incident
took place.
"Around 4:30 in the afternoon of February
15, 1998, Feliciano reported to the Desk
Officer, SPO2 Alberto Libao of the Lipa
Police Satation, that the body of his
brother, Wilfredo Castillo, had been found
in the forested area in Barangay Tambo.
Thereafter, Police Inspector Romeo Mitra,
PO2 Enrico Tapalla, SPO4 Renaldo
Saludo and SPO3 Pablo de Luna were
dispatched to the crime scene to
investigate the incident. Feliciano went
with them. When Edok's body was
retrieved, SPO4 Saludo noticed the
presence of stab wounds, blows and
hematomas on his body. The cadaver was
then taken to Funeraria San Sebastian at
Balagbag, Lipa City.
"About 7:30 in the evening of February 15,
1998, Dr. Corazon Sabile, Health Officer of
Lipa City, conducted an autopsy on Edok's
body. The physical examination yielded
the following results: there were nine (9)
injuries on the head, two (2) of which were
stab wounds, one stab wound on the right
frontal area of the right ear which reached
the skull and the second stab wound also
at his right ear; one (1) lacerated gaping
wound on the head; there were several
contusions and hematoma on both eyes
which could have been caused by
mauling, and hematomas on the middle
mandibular area and the lateral
mandibular area (chin) which could have
been caused by mauling or the dumping of
the cadaver in to the well; there are also
linear abrasions on the right lateral neck
area that could have been caused by
forcible contact; there were nine (9)
wounds on the body, that is, four (4) stab
wounds and five (5) abrasions; the first
stab wound was on the third intercostal
space midelavicular area, the second on
the fifth intercostal space, right
midelavicular area, the third on the
8th intercostal space midelavicular area,
and the fourth [was] on the right lumbar
area; the said wounds were almost of the
same depth, that is 5 cms; all of the said
wounds could have been caused by a
sharp pointed instrument; she also found
five (5) abrasion on the body, i.e., in the left
midscapular area, left infrascapular area,
on the vertebral line, on the right
midscapular area and on the vertebral line;
that the abrasions are called 'gasgas' and
could have been caused by forcible
contact; she also found in the extrem[i]ties
of the cadaver two (2) stab wounds on the
right anterior thigh 4 to 5 cms. deep; she
also found three (3) abrasions on the right
forearm, left posterior arm and left
posterior hand which could have been
caused by forcible contact. The internal
examination on the victim's body revealed
that 200 ml. of blood were found in the
fleural cavity which could have come from
the perforations of the right ventricle of the
heart; the liver and upper lobe of the right
lung were perforated; there were complete
fractures on the 2nd, 3rd, 4th, 5th, 6th, 7th of
both ribs which alone were sufficient to
cause death. The mauling was aggravated
by the dumping of the Edok's body in the
well. Considering the nature and number
of injuries Edok sustained, no medical
attention and assistance could have saved
his life. The cause of Edok's death was
Hypovolemia secondary to multiple stab
wounds.
"On February 16, 1998, Marcial Morillo told
Ruben Castillo about the mauling incident
119
 which (Morillo) had witnessed on the night
of February 14, 1998.
"Bothered by his conscience, on February
17, 1998, Morillo went to the Lipa Police
Station to report the incident."8 (Citations
omitted)
Version of the Defense
Appellants gave the following narration of the
facts:9
"The defense maintained that in the
evening of February 14, 1998 accused
Jackson Cuenca and Bernie Agon
together with three [V]isayan [C]alabarzon
workers identified as Obet, Nognog and
Ruel were in the house of Yolanda Cuenca
in the evening of February 14, 1998 at
Brgy. Tambo, Lipa City about one
kilometer away from the place of Marcial
Morillo, the alleged eyewitness, in whose
place according to Marcial Morillo the
crime was committed. While these
persons were in said house of Yolanda
Cuenca, they heard a voice calling for
Jackson who was identified as Wilfredo
Castillo. Jackson Cuenca came out [of] the
house and asked Wilfredo Castillo what
was the problem[;] however, Wilfredo
Castillo immediately hacked him who was
wounded at the right side of his back.
Witness Yolanda Cuenca brought him
inside her house and attended to his
wound. While bringing him inside the
house, Jackson was struggling to be free,
[and] the three Visayan [C]alabarzon
workers visitors went outside and
thereafter a commotion took place. During
the commotion, Yolanda Cuenca heard
somebody [utter] the words 'sobra-sobra
na ang ginagawa mo sa mga tao dito'. The
following day, February 15, 1998, two of
the three Visayan Calabarzon Workers
namely Obet and Nognog arrived at the
house of Yolanda Cuenca and told her that
she [would] say that she saw and heard
nothing about the commotion.
"Accused Gerry Cuenca and Crisanto
Agon were not in the house of Yolanda
Cuenca where the commotion took place
[o]n the evening of February 14, 1998 and
they were not also near the house of
Marcial Morillo where the crime took place
allegedly [o]n the evening of February 14,
1998. On that time and date, they were at
the house of Roger Dimaculangan at
Normanz Village, Tambo, Lipa City helping
in the preparation of food for the baptismal
party on February 15, 1998. Other than
accused-appellants Andy Obille, Benjamin
Anterola and Romy Anterola and other
people were there. Accused-appellants
vehemently denied that they were the
ones who killed Wilfredo Castillo alias
'Edok' in the evening of February 14,
1998."10
The Trial Court's Ruling
The RTC convicted appellants because the lone
prosecution witness, Marcial Morcillo, was
credible. It said: "the Court believes and gives
weight to the candid, vivid and detailed account of
the incident and positive identification of all the
accused by Marcial Morcillo, not only because it is
clear, straight-forward and devoid of any signs of
artificiality, but also because it vibrates with truth
and sincerity."11
The court a quo held that conspiracy attended the
killing:
"In this case, Crisanto and Bernie Agon
were each holding the hands of Wilfredo
Castillo, while the brothers Gerry and
Jackson Cuenca helped each other in
beating him with a piece of [wood] about
one (1) meter long x x x. After Castillo
slumped and lost consciousness, the four
(4) accused helped each other in carrying
Wilfredo Castillo towards the Calabarzon
Highway going to the direction of Batangas
City. Verily, at the precise moment of the
execution of the crime, the accused acted
in concert to accomplish a common
objective to take the life of Wilfredo
Castillo. The fact that Marcial Morillo did
not witness the actual stabbing and killing
of Wilfredo Castillo is of no moment."12
It disbelieved the defenses of denial and alibi.
Hence, this appeal.13
Issues
In their Brief, appellants fault the trial court with the
following alleged errors:
"1. The honorable trial court erred in giving
weight to the testimony of the alleged lone
eyewitness, Marcial Mor[c]illo.
120
 "2. The honorable trial court erred in not
considering that the victim died of multiple
stab wounds and not due to injuries
caused by a piece of wood.
"3. The honorable trial court erred in not
considering the defense of alibi of
accused-appellants in the appreciation of
the whole evidence presented by the
prosecution and defense."14
This Court's Ruling
After reviewing the records of this case, we find no
cogent basis to reverse appellants' conviction. We
however modify the award of civil liabilities.
First Issue:
Credibility of Lone Prosecution Witness
Appellants assail the credibility of Marcial Morcillo,
the lone prosecution witness. They contend that
the trial court erred in giving full credence to
Morcillo's testimony, because it was not "in
accordance with common experience and
observation of mankind."15 We disagree.
We carefully reviewed the testimonies of both the
prosecution and the defense witnesses, as well as
the other pieces of evidence on record. We are
convinced that the trial court did not err in giving
full faith and credence to Morcillo's testimony,
which we reproduce in part as follows:
"Q: On February 14, 1998, around 9:30
o'clock in the evening, do you remember
where you were?
A: I was inside my house sir.
Q: Where was your house on that date,
February 14, 1998, 9:30 o'clock in the
evening?
A: At Module Subdivision, Tambo, Lipa
City sir.
Q: What were you doing around that time,
9:30 o'clock in the evening of February 14,
1998 inside your house in Module
Subdivision, Tambo, Lipa City?
A: We were already lying down sir.
Q: You said we, who were with you in your
house?
A: My wife and my family sir.
Q: While you were then already lying down
on that date, February 14, 1998 around
9:30 o'clock in the evening, do you
remember x x x any unusual incident that
transpired?
A: Yes sir.
Q: What was that unusual incident that
transpired?
A: There was a commotion of people sir.
Q: How did you come to know that there
was a commotion of people?
A: My dog and the dogs of my neighbors
were barking sir.
Q: What did you do when you heard this
commotion of people and barking of the
dog and the dogs of your neighbors?
A: I went out of the house and looked for
[what] the commotion was all about[,] sir.
Q: What did you see when you looked [for]
where this commotion [was] coming [from]
or what was causing this commotion?
A: I saw a person being beaten by four (4)
persons sir.
Q: Were these four (4) persons or in what
place in relation to your house where these
four (4) persons beating one person?
A: In the street sir.
Q: How far is that place from your own
house?
A: About ten (10) meters sir.
Q: Where were you when you saw four (4)
persons beating one (1) person?
A: I was hiding behind [a] PLDT Telephone
post sir.
Q: From the place where you were hiding
behind a PLDT Telephone Post, how far
[away from you] were these four (4)
121
persons who were beating another person
x x x?
A: 10 meters sir.
Q: Were you able to recognize these four
(4) persons who were beating another
person?
A: Yes, sir.
Q: Who were these four (4) persons whom
you saw were beating another person.
A: Crisanto Agon, Bernie Agon, Jackson
Cuenca and Gerry Cuenca sir.
Q: Of these (4) persons whom you named
Gerry Cuenca and Crisanto Agon were the
persons whom you pointed [to] a while ago
[among them]?
A: Yes sir.
Q: Were you able to recognize the person
whom these four (4) accused were
beating?
A: Yes, sir. I recognized him.
Q: Who was that person who was being
beaten by these four (4) accused, Gerry
Cuenca, Jackson Cuenca, Crisanto Agon
and Bernie Agon?
A: Edok Castillo sir.
Q Do you know the complete name of
this Edok Castillo?
A: I quite remember, it is Alfredo Castillo,
sir.
Q: And how were Gerry Cuenca, Jackson
Cuenca, Crisanto Agon and Bernie Agon
beating this Edok Castillo?
A: The father and son were holding Edok
Castillo and the brothers were beating him
sir.
Q: When you said that the father and son
were holding Edok Castillo while the
brothers were beating him, who are you
referring to when you said the father and
son?
A: Crisanto Agon and Bernie Agon sir.
Q: How was Crisanto Agon holding Edok
Castillo while the brothers were beating
Edok Castillo?
A: The father and son were holding [both
hands of] Edok Castillo.
Q: What hand was Crisanto Agon holding?
A: Left hand sir.
Q: How about Bernie Agon, what hand of
Edok Castillo was he holding?
A: The right hand sir.
Q: How about Gerry Cuenca? Where was
he positioned in relation to Edok Castillo
when he was beating Edok?
A: Right front portion of Edok Castillo sir.
Q: How about Jackson Cuenca, where
was he positioned in relation to Edok
Castillo while he was beating Edok
Castillo?
A: He was standing towards the left front
of Edok Castillo sir.
xxx xxx xxx
Q: Aside from stooping down, what else
was Edok Castillo doing while he was
being beaten by Gerry Cuenca and
Jackson Cuena and while Bernie Agon
and Crisanto Agon were holding his two
hands?
A: He lost consciousness sir.
Q: Why do say that he lost consciousness?
A: 'Lumugmok na po siya'.
Q: But before Edok Castillo actually fe[l]l or
'lumugmok' what was he doing while he
was being beaten up?
A: He could not do anything anymore sir.
Q: After Wilfredo Castillo [fell] or
lumugmok, what did Gerry Cuenca,
Jackson Cuenca, Crisanto Agon and
122
 Bernie Agon do to him if they did anything
more?
A: [T]hey carried him towards Calabarzon,
sir.
Q: By the way, how many times did Gerry
Cuenca and Jackson Cuenca hit Edok
Castillo?
A: I could not remember, but he was hit
several times, sir.
Q: In what part or parts of the body of Edok
Castillo was he hit by th[o]se beating [him
up], if he was ever hit?
xxx xxx xxx
Witness pointing his face, to his head, to
his chest and to his right face below the
eye.
Q: You said that after Gerry Cuenca and
Jackson Cuenca [beat] up Edok Castillo
while he was being held [by] his two (2)
hands by Crisanto and Bernie Agon, he fell
down or 'lumugmok' [and] he was carried
to Calabarzon[;] what do you mean by this
Calabarzon?
A: The highway going to Batangas sir.
Q: How did the four (4) carry Edok Castillo
towards the Calabarzo[n] which is the road
according to you going to Batangas City?
A: They help[ed] each other in carrying him
sir.
Q: How did they carry actually this Edok
Castillo?
A: The two (2) were carrying him by [both
his] hands[,] one [holding] on each hand
and the other two (2) were holding on [both
his] feet sir.16
On cross-examination Morcillo consistently
maintained, despite intense grilling and repeated
attempts of the defense counsel to discredit him,
that appellants were the ones who had mauled the
victim. True, the defense counsel tried to impeach
his credibility during the cross-examination by
leading him through an intricate and annoying
maze of questions that resulted in minor
inconsistencies in his testimonial declarations.
Nevertheless, Morcillo remained steadfast in his
narration of what he had witnessed on the night of
February 14, 1998.
So long as the witnesses' testimonies agree on
substantial matters, inconsequential
inconsistencies and contradictions dilute neither
their credibility nor the verity of their
testimonies.17 In the instant case, the
inconsistencies cited by appellants are
insignificant and immaterial to the essential fact
testified to -- the killing of the victim.18
As a rule, this Court will not disturb the factual
findings of the trial court, because it had a better
opportunity to observe the demeanor and conduct
of the witnesses while they were testifying. Indeed,
its assessment of the witnesses and their
credibility is entitled to great weight and is even
conclusive and binding, if not tainted with
arbitrariness or oversight of some fact or
circumstance of significance and value.19
This Court has ruled in a number of cases20 that the
testimony of a single witness, if credible and
positive, is sufficient for conviction because truth is
established not by the quantity, but by the quality
of the evidence.
Second Issue:
Cause of the Victim's Death
Appellants also contend that Morcillo did not see
how the victim was stabbed. All he said was that
he saw them beat up the victim with a piece of
wood. Thus, they said that the trial court erred in
concluding that the deceased had succumbed, not
to multiple stab wounds, but to injuries caused by
a piece of wood.21
In the absence of direct evidence, appellants may
be convicted on the basis of circumstantial
evidence. The latter is defined as "that which
indirectly proves a fact in issue through an
inference which the factfinder draws from the
evidence established. Resort thereto is essential
when the lack of direct testimony would result in
setting a felon free."22
Circumstantial evidence suffices to convict if the
following requisites concur: (1) more than one
circumstance is present, (2) the facts from which
the inferences are derived are proven, and (3) the
combination of all the circumstances produces a
conviction beyond reasonable doubt. The totality
of the evidence must constitute an unbroken chain
showing beyond reasonable doubt the guilt of the
accused, to the exclusion of all others.23
123
To require direct eyewitness testimony when
circumstantial evidence is sufficiently established
would, in many cases, expose society to felons
who would be unreasonably set free.24
In the present case, the postmortem examination
shows that the victim sustained multiple
lacerations and abrasions plus eight stab
wounds.25 The following pieces of circumstantial
evidence show beyond reasonable doubt that
appellants are responsible for the killing:
First, Morcillo positively identified
appellants as members of the group that
had ganged up on the victim and mauled
him near his residence around 9:30 in the
evening on February 14, 1998.
Second, the witness saw appellants acting
in unison -- beating up then carrying
towards the Calabarzon Highway -- the
unconscious body of the victim.
Third, the victim's corpse was recovered
the next day inside a well, which was less
than a kilometer away from the place of the
mauling.
Fourth, the victim suffered from multiple
stab wounds, abrasions, contusions and
lacerations, all of which indicated that he
had been heavily beaten up. This was
consistent with the narration of Morcillo on
how he saw appellants maul the victim less
than 24 hours before the dead body was
discovered.
Fifth, appellants were the last persons
seen with the victim before he died.
Sixth, the other accused, Jackson Cuenca
(brother of Appellant Gerry Cuenca) and
Bernie Agon (son of Appellant Crisanto
Agon) fled from their residence in Lipa
City, and they have continuously evaded
arrest up to the present.
Finally, Morcillo had no ill motive to testify
against appellants.
From the foregoing circumstances, it is undisputed
that appellants were physically present at
the locus criminis and its immediate vicinity, and
that an eyewitness positively identified them to be
members of the group that had mauled and
removed the victim from the crime scene prior to
the discovery of his corpse.
Third Issue:
Defense of Alibi
Well-settled is the rule that alibi is the weakest of
all defenses, because it is easy to concoct and
difficult to disprove. For alibi to prosper, it is not
enough for the accused to prove that they were
somewhere else when the crime was committed;
they must likewise demonstrate that it was
physically impossible for them to have been at the
scene of the crime at the time.26
In the case before us, appellants claim that at the
time the crime happened, they were at the
residence of Roger Dimaculangan, which was
located also at Barangay Tambo, Lipa City.
Dismissing this claim, the RTC said:
"Alibi and denial are inherently weak and
easily contrived. This is why the accused
must prove with clear and convincing
evidence that it was physically impossible
for him to have been present at the place
and time the felony was committed. This
the accused failed to do. The distance
between the house of Roger
Dimaculangan, where both accused
claimed to be at the time the f[e]lony was
committed and the locus criminis is just a
few kilometers away. It can be travelled in
a few minutes by bicycle. Thus, it was not
impossible for Gerry Cuenca and Crisanto
Agon to leave and, after killing Wilfredo
Castillo, return to the house of
Dimaculangan without anybody noticing
their absence. In any event, alibi and
denial cannot overcome the categorical
and credible testimony of Marcial Morcillo
identifying both accused as among those
whom he saw helping each other in
holding and beating Wilfredo Castillo and
thereafter carrying him towards
[C]alabarzon Highway going to the
direction of Batangas City. Basic is the rule
that positive identification prevails over
denial and alibi."27
Thus, it was not physically impossible for
appellants to have been at the scene of the crime
on the evening of February 14, 1998,
notwithstanding their friends' testimonies that they
were also at the Dimaculangan residence.
Conspiracy and Treachery
The trial court did not err in finding appellants guilty
of murder because treachery, which was alleged
in the Information, had attended the killing.
124
On this point, the trial court aptly explained:
"Article 14 (16) of the Revised Penal Code
provides that there is treachery when the
offender commits any of the crimes
against persons, employing means,
methods o[r] forms in the execution thereof
which tend directly and specifically to
insure its execution without risk to himself
arising from the defense which the
offended party might make. In the instant
case, Crisanto and Bernie Agon were
holding both hands of Wilfredo Castillo,
while Gerry and Jackson Cuenca were
beating him with a piece of wood on the
different parts of his body. Wilfredo Castillo
was unarmed and defenseless. Hence,
treachery was present."28
Treachery is present when the following conditions
are present: (1) the means of execution employed
gives the victims no opportunity to defend
themselves or to retaliate, and (2) the means of
execution are deliberately or consciously adopted.
In this case, the prosecution succeeded in
showing that appellants, together with their co-
accused (who are still at large), helped each other
in ensuring the execution of their nefarious
intention to beat up and kill the victim who was
unarmed and with no opportunity to defend
himself.
The prosecution was likewise able to show that
there was conspiracy. Conspiracy exists when two
or more persons come to an agreement and
decide on the commission of a felony.29 It is not
necessary that there be direct proof that the co-
conspirators had any prior agreement to commit
the crime; it is sufficient that they acted in concert
pursuant to the same objective.30
Despite affirming appellants' conviction, we
nonetheless modify the monetary awards.
The award of ₱50,000 as indemnity ex delicto for
the loss of the victim's life is in accord with
prevailing jurisprudence.31 Likewise, the award of
₱20,000 as moral damages is reasonable.
However, the actual damages granted is improper
and should be reduced from ₱38,800 to ₱7,300
considering that only the latter amount,
representing burial expenses, was duly supported
by receipts. The unsubstantiated balance of
₱31,500 should be deleted.32
We also find the court a quo's award of
₱4,800,000 for loss of earning capacity to be
improper. True, in People v. Verde,33 we granted
an award for the loss of earning capacity to the
heirs of the deceased despite the absence of
documentary evidence to substantiate such claim.
We deemed the testimony of the victim's wife
sufficient to establish the basis for the grant.
However, the new ruling in People v.
Panabang34 modifies this principle and now
precludes an award for loss of earning capacity
without adequate proof. The bare testimony of the
brother of the deceased Felicisimo Castillo that, at
the time of his death, Wilfredo Castillo was earning
₱250.00 daily as carpenter35 is not sufficient proof.
In Panabang, we held that the indemnification for
loss of earning capacity must be duly proven.
Justice Jose C. Vitug, expressing the current view
of the Court, wrote:
"Indemnification for loss of earning
capacity partakes of the nature of actual
damages which must be duly proven. A
self-serving statement, being unreliable, is
not enough. The father of the victim has
testified on the latter's monthly income of
₱12,000.00. But for lost income to be
recovered, there must likewise be an
unbiased proof of the
deceased's average, not just gross,
income. An award for lost of earning
capacity refers to the net income of the
deceased, i.e., his total income net of
expenses. x x x."36 (Emphasis in the
original, citations omitted)
WHEREFORE, the assailed Decision
is AFFIRMED but the actual damages awarded by
the RTC is REDUCED from ₱35,850 to ₱7,300
while the grant of ₱4,800,000 for loss of earning
capacity is DELETED.
SO ORDERED.
Melo, (Chairman), Vitug, Sandoval-Gutierrez, and
Carpio, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-11037 December 29, 1960
EDGARDO CARIAGA, ET AL., plaintiffs-
appellants,
vs.
LAGUNA TAYABAS BUS
125
COMPANY, defendant-appellant.
MANILA RAILROAD COMPANY, defendant-
appellee.
Ozaeta, Lichauco and Picazo for defendant and
appellant.
E.A. Fernandez and L.H. Fernandez for plaintiffs
and appellants.
Gov't. Corp. Counsel A. Padilla and Atty. F.A.
Umali for appellee.
DIZON, J.:
At about 1:00 p.m. on June 18, 1952, Bus No. 133
of the Laguna Tayabas Bus
Co. — hereinafter referred to as the LTB — driven
by Alfredo Moncada, left its station at Azcarraga
St., Manila, for Lilio, Laguna, with Edgardo
Cariaga, a fourth-year medical student of the
University of Santo Tomas, as one of its
passengers. At about 3:00 p.m., as the bus
reached that part of the poblacion of Bay, Laguna,
where the national highway crossed a railroad
track, it bumped against the engine of a train then
passing by with such terrific force that the first six
wheels of the latter were derailed, the engine and
the front part of the body of the bus was wrecked,
the driver of the bus died instantly, while many of
its passengers, Edgardo among them, were
severely injured. Edgardo was first confined at the
San Pablo City Hospital from 5:00 p.m., June 18,
1952, to 8:25 a.m., June 20 of the same year when
he was taken to the De los Santos Clinic, Quezon
City. He left that clinic on October 14 to be
transferred to the University of Santo Tomas
Hospital where he stayed up to November 15. On
this last date he was taken back to the De los
Santos Clinic where he stayed until January 15,
1953. He was unconscious during the first 35 days
after the accident; at the De los Santos Clinic Dr.
Gustilo removed the fractured bones which
lacerated the right frontal lobe of his brain and at
the University of Santo Tomas Hospital Dr. Gustilo
performed another operation to cover a big hole on
the right frontal part of the head with a tantalum
plate.
The LTB paid the sum of P16,964.45 for all the
hospital, medical and miscellaneous expenses
incurred from June 18, 1952 to April, 1953. From
January 15, 1953 up to April of the same year
Edgardo stayed in a private house in Quezon, City,
the LTB having agreed to give him a subsistence
allowance of P10.00 daily during his
convalescence, having spent in this connection
the total sum of P775.30 in addition to the amount
already referred to.
On April 24, 1953 the present action was filed to
recover for Edgardo Cariaga, from the LTB and the
MRR Co., and total sum of P312,000.00 as actual,
compensatory, moral and exemplary damages,
and for his parents, the sum of P18,00.00 in the
same concepts. The LTB disclaimed liability
claiming that the accident was due to the
negligence of its co-defendant, the Manila
Railroad Company, for not providing a crossing
bar at the point where the national highway
crossed the railway track, and for this reason filed
the corresponding cross-claim against the latter
company to recover the total sum of P18,194.75
representing the expenses paid to Edgardo
Cariaga. The Manila Railroad Company, in turn,
denied liability upon the complaint and cross-claim
alleging that it was the reckless negligence of the
bus driver that caused the accident.
The lower court held that it was the negligence of
the bus driver that caused the accident and, as a
result, rendered judgment sentencing the LTB to
pay Edgardo Cariaga the sum of P10,490.00 as
compensatory damages, with interest at the legal
rate from the filing of the complaint, and dismissing
the cross-claim against the Manila Railroad
Company. From this decision the Cariagas and the
LTB appealed.
The Cariagas claim that the trial court erred: in
awarding only P10,490.00 as compensatory
damages to Edgardo; in not awarding them actual
and moral damages, and in not sentencing
appellant LTB to pay attorney's fees.
On the other hand, the LTB's principal contention
in this appeal is that the trial court should have held
that the collision was due to the fault of both the
locomotive driver and the bus driver and erred, as
a consequence, in not holding the Manila Railroad
Company liable upon the cross-claim filed against
it.
We shall first dispose of the appeal of the bus
company. Its first contention is that the driver of the
train locomotive, like the bus driver, violated the
law, first, in sounding the whistle only when the
collision was about to take place instead of at a
distance at least 300 meters from the crossing,
and second, in not ringing the locomotive bell at
all. Both contentions are without merits.
After considering the evidence presented by both
parties the lower court expressly found:
. . . While the train was approximately 300
meters from the crossing, the engineer
sounded two long and two short whistles
126
 and upon reaching a point about 100
meters from the highway, he sounded a
long whistle which lasted up to the time the
train was about to cross it. The bus
proceeded on its way without slackening
its speed and it bumped against the train
engine, causing the first six wheels of the
latter to be derailed.
xxx xxx xxx
. . . that the train whistle had been sounded
several times before it reached the
crossing. All witnesses for the plaintiffs
and the defendants are uniform in stating
that they heard the train whistle sometime
before the impact and considering that
some of them were in the bus at the time,
the driver thereof must have heard it
because he was seated on the left front
part of the bus and it was his duty and
concern to observe such fact in connection
with the safe operation of the vehicle. The
other L.T.B. bus which arrived ahead at the
crossing, heeded the warning by stopping
and allowing the train to pass and so
nothing happened to said vehicle. On the
other hand, the driver of the bus No. 133
totally ignored the whistle and noise
produced by the approaching train and
instead he tried to make the bus pass the
crossing before the train by not stopping a
few meters from the railway track and in
proceeding ahead.
The above findings of the lower court are
predicated mainly upon the testimony of Gregorio
Ilusondo, a witness for the Manila Railroad
Company. Notwithstanding the efforts exerted by
the LTB to assail his credibility, we do not find in
the record any fact or circumstance sufficient to
discredit his testimony. We have, therefore, no
other alternative but to accept the findings of the
trial court to the effect, firstly, that the whistle of
locomotive was sounded four times — two long
and two short — "as the train was approximately
300 meters from the crossing"; secondly, that
another LTB bus which arrived at the crossing
ahead of the one where Edgardo Cariaga was a
passenger, paid heed to the warning and stopped
before the "crossing", while — as the LTB itself
now admits (Brief p. 5) — the driver of the bus in
question totally disregarded the warning.
But to charge the MRR Co. with contributory
negligence, the LTB claims that the engineer of the
locomotive failed to ring the bell altogether, in
violation of the section 91 of Article 1459,
incorporated in the charter of the said MRR Co.
This contention — as is obvious — is the very
foundation of the cross-claim interposed by the
LTB against its
co-defendant. The former, therefore, had the
burden of proving it affirmatively because a
violation of law is never presumed. The record
discloses that this burden has not been
satisfactorily discharged.
The Cariagas, as appellants, claim that the award
of P10,000.00 compensatory damages to Eduardo
is inadequate considering the nature and the after
effects of the physical injuries suffered by him.
After a careful consideration of the evidence on
this point we find their contentions to be well-
founded.
From the deposition of Dr. Romeo Gustilo, a
neurosurgeon, it appears that, as a result of the
injuries suffered by Edgardo, his right forehead
was fractured necessitating the removal of
practically all of the right frontal lobe of his brain.
From the testimony of Dr. Jose A. Fernandez, a
psychiatrist, it may be gathered that, because of
the physical injuries suffered by Edgardo, his
mentality has been so reduced that he can no
longer finish his studies as a medical student; that
he has become completely misfit for any kind of
work; that he can hardly walk around without
someone helping him, and has to use a brace on
his left leg and feet.
Upon the whole evidence on the matter, the lower
court found that the removal of the right frontal lobe
of the brain of Edgardo reduced his intelligence by
about 50%; that due to the replacement of the right
frontal bone of his head with a tantalum plate
Edgardo has to lead a quite and retired life
because "if the tantalum plate is pressed in or
dented it would cause his death."
The impression one gathers from this evidence is
that, as a result of the physical injuries suffered by
Edgardo Cariaga, he is now in a helpless
condition, virtually an invalid, both physically and
mentally.
Appellant LTB admits that under Art. 2201 of the
Civil Code the damages for which the obligor,
guilty of a breach of contract but who acted in good
faith, is liable shall be those that are the natural
and probable consequences of the breach and
which the parties had forseen or could have
reasonably forseen at the time the obligation was
constituted, provided such damages, according to
Art. 2199 of the same Code, have been duly
proved. Upon this premise it claims that only the
127
actual damages suffered by Edgardo Cariaga
consisting of medical, hospital and other expenses
in the total sum of P17,719.75 are within this
category. We are of the opinion, however, that the
income which Edgardo Cariaga could earn if he
should finish the medical course and pass the
corresponding board examinations must be
deemed to be within the same category because
they could have reasonably been foreseen by the
parties at the time he boarded the bus No. 133
owned and operated by the LTB. At that time he
was already a fourth-year student in medicine in a
reputable university. While his scholastic may not
be first rate (Exhibits 4, 4-A to 4-C), it is,
nevertheless, sufficient to justify the assumption
that he could have passed the board test in due
time. As regards the income that he could possibly
earn as a medical practitioner, it appears that,
according to Dr. Amado Doria, a witness for the
LTB, the amount of P300.00 could easily be
expected as the minimum monthly income of
Edgardo had he finished his studies.
Upon consideration of all the facts mentioned
heretofore this Court is of the opinion, and so
holds, that the compensatory damages awarded to
Edgardo Cariaga should be increased to
P25,000.00.
Edgardo Cariaga's claim for moral damages and
attorney's fees was denied by the trial court, the
pertinent portion of its decision reading as follows:
Plaintiffs' claim for moral damages cannot
also be granted. Article 2219 of the Civil
Code enumerates the instances when
moral damages may be covered and the
case under consideration does not fall
under any one of them. The present action
cannot come under paragraph 2 of said
article because it is not one of the quasi-
delict and cannot be considered as such
because of the pre-existing contractual
relation between the Laguna Tayabas Bus
Company and Edgardo Cariaga. Neither
could defendant Laguna Tayabas Bus
Company be held liable to pay moral
damages to Edgardo Cariaga under Article
2220 of the Civil Code on account of
breach of its contract of carriage because
said defendant did not act fraudulently or
in bad faith in connection therewith.
Defendant Laguna Tayabas Bus Company
had exercised due diligence in the
selection and supervision of its employees
like the drivers of its buses in connection
with the discharge of their duties and so it
must be considered an obligor in good
faith.
The plaintiff Edgardo Cariaga is also not
entitled to recover for attorney's fees,
because this case does not fall under any
of the instances enumerated in Article
2208 of the Civil Code.
We agree with the trial court and, to the reason
given above, we add those given by this Court in
Cachero vs. Manila Yellow Taxicab Co., Inc.(101
Phil., 523, 530, 533):
A mere perusal of plaintiff's complaint will
show that this action against the defendant
is predicated on an alleged breach of
contract of carriage, i.e., the failure of the
defendants to bring him "safely and
without mishaps" to his destination, and it
is to be noted that the chauffeur of
defendant's taxicab that plaintiff used
when he received the injuries involved
herein, Gregorio Mira, has not even made
a party defendant to this case.
Considering, therefore, the nature of
plaintiff's action in this case, is he entitled
to compensation for moral damages?
Article 2219 of the Civil Code says the
following:
Art. 2219. Moral damages may be
recovered in the following and analogous
cases:
(1) A criminal offense resulting in physical
injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other
lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of
defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles
21, 26, 27, 28, 29, 30, 32, 34, and 35.
128
 xxx xxx xxx
Of course enumerated in the just quoted
Article 2219 only the first two may have
any bearing on the case at bar. We find,
however, with regard to the first that the
defendant herein has not committed in
connection with this case any "criminal
offense resulting in physical injuries". The
one that committed the offense against the
plaintiff is Gregorio Mira, and that is why
he has been already prosecuted and
punished therefor. Altho (a) owners and
managers of an establishment and
enterprise are responsible for damages
caused by their employees in the service
of the branches in which the latter are
employed or on the occasion of their
functions; (b) employers are likewise liable
for damages caused by their employees
and household helpers acting within the
scope of their assigned task (Article 218 of
the Civil Code); and (c) employers and
corporations engaged in any kind of
industry are subsidiary civilly liable for
felonies committed by their employees in
the discharge of their duties (Art. 103,
Revised Penal Code), plaintiff herein does
not maintain this action under the
provisions of any of the articles of the
codes just mentioned and against all the
persons who might be liable for the
damages caused, but as a result of an
admitted breach of contract of carriage
and against the defendant employer alone.
We, therefore, hold that the case at bar
does not come within the exception of
paragraph 1, Article 2219 of the Civil Code.
The present complaint is not based either
on a "quasi-delict causing physical
injuries" (Art. 2219, par. 2 of the Civil
Code). From the report of the Code
Commission on the new Civil Code. We
copy the following:
A question of nomenclature confronted the
Commission. After a careful deliberation, it
was agreed to use the term "quasi-delict"
for those obligations which do not arise
from law, contracts, quasi-contracts, or
criminal offenses. They are known in
Spanish legal treaties as "culpa aquiliana",
"culpa-extra-contractual" or "cuasi-
delitos". The phrase "culpa-extra-
contractual" or its translation "extra-
contractual-fault" was eliminated because
it did not exclude quasi-contractual or
penal obligations. "Aquilian fault" might
have been selected, but it was thought
inadvisable to refer to so ancient a law as
the "Lex Aquilia". So "quasi-delict" was
chosen, which more nearly corresponds to
the Roman Law classification of the
obligations and is in harmony with the
nature of this kind of liability.
The Commission also thought of the
possibility of adopting the word "tort" from
Anglo-American law. But "tort" under that
system is much broader than the Spanish-
Philippine concept of obligations arising
from non-contractual negligence. "Tort" in
Anglo-American jurisprudence includes
not only negligence, but also intentional
criminal act, such as assault and battery,
false imprisonment and deceit. In the
general plan of the Philippine legal system,
intentional and malicious acts are
governed by the Penal Code, although
certain exceptions are made in the Project.
(Report of the Code Commission, pp. 161-
162).
In the case of Cangco, vs. Manila
Railroad, 38 Phil. 768, We established the
distinction between obligation derived from
negligence and obligation as a result of a
breach of contract. Thus, we said:
It is important to note that the foundation of
the legal liability of the defendant is the
contract of carriage, and that the obligation
to respond for the damage which plaintiff
has suffered arises, if at all, from the
breach of that contract by reason of the
failure of defendant to exercise due care in
its performance. That is to say, its liability
is direct and immediate, differing
essentially in the legal viewpoint from the
presumptive responsibility for the
negligence of its servants, imposed by
Article 1903 of the Civil Code (Art. 2180 of
the new), which can be rebutted by proof
of the exercise of due care in their
selection of supervision. Article 1903 is not
applicable to obligations arising EX
CONTRACTU, but only to extra-
contractual obligations — or to use the
technical form of expression, that article
relates only to CULPA AQUILIANA' and
not to CULPA CONTRACTUAL. lawphil.net
The decisions in the cases of Castro vs.
Acro Taxicab Co., (82 Phil., 359; 46 Off.
Gaz., No. 5, p. 2023); Lilius, et al. vs.
Manila Railroad, 59 Phil., 758) and others,
129
 wherein moral damages were awarded to
the plaintiffs, are not applicable to the case
at bar because said decision were
rendered before the effectivity of the new
Civil Code (August 30, 1950) and for the
further reason that the complaints filed
therein were based on different causes of
action.
In view of the foregoing the sum of P2,000
was awarded as moral damages by the
trial court has to be eliminated, for under
the law it is not a compensation awardable
in a case like the one at bar.
What has been said heretofore relative to the
moral damages claimed by Edgardo Cariaga
obviously applies with greater force to a similar
claim (4th assignment of error) made by his
parents.
The claim made by said spouses for actual and
compensatory damages is likewise without merits.
As held by the trial court, in so far as the LTB is
concerned, the present action is based upon a
breach of contract of carriage to which said
spouses were not a party, and neither can they
premise their claim upon the negligence or quasi-
delict of the LTB for the simple reason that they
were not themselves injured as a result of the
collision between the LTB bus and train owned by
the Manila Railroad Company.
Wherefore, modified as above indicated, the
appealed judgement is hereby affirmed in all other
respects, with costs against appellant LTB.
Paras, C.J., Bengzon, Bautista Angelo, Labrador,
Reyes, J.B.L., Barrera, Gutierrez David, and
Paredes, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 89684 September 18, 1990
PEOPLE OF THE PHILIPPINES, plaintiff-
appellee,
vs.
GERARDO SAZON, alias "INSIK," accused-
appellant.
The Solicitor General for plaintiff-appellee.
Benjamin P. Sorongon for accused-appellant.
REGALADO, J.:
For the death of Wilfredo Longno, alias, "Inday," on September 17,
1983 at Barangay Progreso, Lapuz, La Paz, Iloilo City, herein accused-
appellant Gerardo Sazon, alias "Insik," and Cornelio Altejos, alias
"Toto," were charged with murder before the Regional Trial Court of
Iloilo, 1 in an amended information dated October 18, 1983.2 However,
only herein accused was arraigned, and pleaded not guilty, since
Cornelio Altejos was not apprehended and has since remained at
large.
After trial, appellant was found guilty and
sentenced to serve the penalty of reclusion
perpetua. He was further ordered to pay the heirs
of the deceased the amount of P16,628.40
representing hospital bills, expenses for the coffin,
tomb, wake and attorney's fees, and P30,000.00
as indemnity for the death of the victim.
The antecedental facts which led to the filing of the
criminal action below are herein under set forth as
synthesized by the court a quo from the
testimonies of the witnesses, 3 and as clarified and
amplified by us from the transcripts of the notes of
the hearings.
On September 15, 1983, in the barangay
aforementioned, a certain Ernesto Romualdez
was accosted by appellant near the barangay hall
for allegedly circulating the rumor that appellant
and his companions were engaged in stealing.
Upon confrontation, appellant boxed Romualdez
which caused the latter to fall. Wilfredo Longo, who
was then present at the scene, approached and
helped the fallen Romualdez and pushed
appellant away. This apparently angered appellant
who, in his native dialect said "Andam ka lang
Inday kay patyon ta guid," ("Watch out Inday for I
will kill you") to which Longno retorted, "Just do it."
Two days later, or on September 17, 1983, at
about 8:00 o'clock P.M., appellant and his cousin,
Cornelio Altejos, were drinking softdrinks at the
shire of Gloria Aposaga when Longno passed by.
Thereupon, appellant and Altejos left their
softdrinks half-assumed and followed Longno.
Longno eventually reached the bench near the
public faucet where the group of Massulini Dullete,
Samuel Canoso and Nathaniel Ramos were
sitting. He joined the group in their conversation by
saying, "Upon ako dira." ("I'll go with what you
say."). Shortly thereafter, appellant and Altejos
arrived and appellant accosted and pointed a gun
at Longno, saying, "Maano ka?" ("What are you
going to do?"). Longno then faced appellant and
said, "Brod, tiruha lang." ("Brod, just shoot.")
130
Apparently irked by the response, appellant fired
the gun, hitting Longno in the left forearm. Dullete,
Canoso and Ramos then scampered for safety as
appellant and the wounded Longno grappled for
the gun. It was while the two were thus struggling
that Altejos stabbed Longno in the chest, after
which both appellant and Altejos ran away.
Longno then came out of the footwalk shouting,
"Tay tiniro ako ni Insik, binuno ako ni Toto."
("Father, I was shot by Insik and stabbed by
Toto."). He was able to run about thirty (30) meters
before he fell. His father, Julio Longno, ran to his
son who was then lying sprawled on the ground.
Rushed to the St. Paul's Hospital, Wilfredo Longno
died. Later, it was established that the cause of
death was hemorrhage, secondary to stab wound.
Appellant's version of the incident, however,
differs. He admits having shot Longno but pleads
self-defense. He claims that on September 17,
1983, he left the house of his father-in-law at about
8:00 o'clock P.M. with his cousin, Altejos. The
latter had asked for help to have a .22 caliber
revolver repaired and appellant was taking the
revolver to a policeman friend of his. On their way,
appellant saw Longno from a distance. Upon his
approach, Longno allegedly said, "Insik, I heard
that you are not afraid of me. Maybe you want to
be taught a lesson." 4
Appellant claims that the deceased had a revolver
tucked in his waist and was about to draw the
same. He, therefore, parried the gun but it fired
hitting one of appellant's left fingers which was
later amputated. It was then that appellant pulled
out his gun and shot Longno in the forearm.
Appellant and Longno afterwards grappled for the
gun. Altejos allegedly tried to separate appellant
and Longno but he was brushed aside by the
latter. In the course of their struggle, Altejos then
shouted to appellant, "I stabbed Inday, run," and
so he and Altejos ran away. 5
Appellant, in his brief, makes the following
assignment of errors:
1. The trial court erred in not acquitting the
accused-appellant for having acted in
complete self-defense.
2. The trial court erred in convicting the
accused-appellant of the crime of murder
and in imposing the penalty of reclusion
perpetua when the prosecution has not
established by competent evidence the
existence of conspiracy and the presence
of the aggravating circumstances of
evident premeditation and abuse of
superior strength. 6
Appellant's version does not inspire credence.
Well-entrenched is the rule that where the accused
invokes self-defense, it is incumbent upon him to
prove by clear and convincing evidence that he
indeed acted in defense of himself. He must rely
on the strength of his own evidence and not on the
weakness of the prosecution. For, even if the
prosecution evidence is weak, it could not be
disbelieved after the accused himself had admitted
the killing. 7
It is a statutory and doctrinal requirement that for
the justifying circumstance of self-defense, the
presence of unlawful aggression is a
condition sine qua non. There can be no self-
defense, complete or incomplete, unless the victim
has committed an unlawful aggression against the
person defending himself.8
In the present case, the burden of evidence having
been shifted, we hold that the defense failed to
establish the primary element of unlawful
aggression on the part of the victim and, therefore,
the plea of self-defense must fail. The narrations
of the sequence of events by the accused, and by
the lone alleged eyewitness for the defense, Jose
Randera, are unconvincing primarily on account of
their inherent inconsistency and conflict with each
other.
Appellant on cross-examination testified as
follows:
Q How far were you from Inday Longno
when he allegedly fired a shot at you?
A One (1) meter.
Q At one (1) meter distance did (sic) you
not able to recognize what kind of a gun
was that allegedly used by Inday Longno?
A No, sir, at first I only saw the handle of
the gun and I did not see the body of the
gun.
Q But you can recognize between a pistol
and a revolver?
A Yes, sir.
Q What was that allegedly used by Inday
Longno, was that a pistol or a revolver?
131
 A Because immediately after he said those
words 'Maybe you want to learn a lesson
he immediately drew his gun and I was
able to parry.
xxx xxx xxx
Q When you fired at Inday Longno hitting
him on his left arm near the elbow, was he
still holding that gun he used in shooting
you hitting you at the left palm?
A No, sir, because of too much force the
gun fell.
Q Did you not pick up the gun?
A No, sir.9
On the other hand, defense eyewitness Jose
Randera stated in his testimony:
ATTY. SORONGON: (To the witness)
Q While Wilfredo Longno alias Inday was
pointing a gun at Gerardo Sazon alias
Insik, what was Gerardo Sazon doing?
WITNESS JOSE RANDERA:
A When Inday said something, Insik Sazon
brushed aside the gun and the gun fired.
xxx xxx xxx
Q You said, that Wilfredo Longno alias
Inday pointed a gun at Gerardo Sazon
alias Insik, with what hand was he holding
that gun when he was pointing that gun to
Gerardo Sazon?
WITNESS JOSE RANDERA:
A His right hand.
ATTY. SORONGON (To the witness)
Q You said that Gerardo Sazon brushed
aside the gun which was being pointed to
him, what hand did Gerardo Sazon used
(sic) in brushing that gun?
A His left hand.
Q When Gerardo Sazon brushed aside the
gun pointed to him, what else if any did he
do?
A Insik also drew a gun and shot Inday,
COURT: (To the witness)
Q What hand?
A Right hand. He drew a gun with his right
hand and shot Inday.
xxx xxx xxx
ATTY. SORONGON (To the witness)
Q You said that there was a brushing, who
was brushing aside and who was brushed
aside?
WITNESS JOSE RANDERA:
Q Inday parried Cornelio Artejos (sic).
COURT: (To the witness)
Q And, what happened next?
Cornelio Artejos (sic) pulled out a knife and
stabbed Inday.
Q This happened when Inday was already
hit by Sazon?
A Yes, sir.
ATTY. SORONGON (To the witness)
Q When Cornelio Artejos (sic) stabbed
Wilfredo Longno alias Inday, what was
Gerardo Sazon and Wilfredo Longno
doing if they were doing anything?
A They were graffling of (sic) the weapon.
Q You are referring to whose weapon they
were graffling (sic) at that time?
A Inday's weapon.10
The testimonies aforequoted reveal an
inconsistency on the matter of the gun for which
appellant and the victim supposedly grappled.
While appellant claimed that the victim's weapon
fell to the ground, witness Randera stated that
132
appellant and the victim still grappled for the
latter's gun. The latter statement is itself difficult to
imagine since appellant at that precise moment
was also allegedly holding with his right hand the
gun which he used in shooting Longno.
It is necessary to stress that such inconsistency
cannot be considered a minor detail since the
homogeneity of the answers to the inquiry could
very well have established the existence of not
only a single gun. Had this prevarication not been
exposed, said testimonies could have bolstered
the defense theory that the victim himself carried a
gun which he used to assault the appellant and
thus establish the element of unlawful aggression
contrived by the defense.
Furthermore, the credibility of witness Randera is
shattered by this finding of the trial court which is
sustained by the evidence:
The testimony of security guard Jose
Randera deserves scant consideration not
only because he admitted that he was one
of those threatened by the deceased
Wilfredo Longno but also because he
wilfully falsified the truth when he testified
that the deceased was shot and hit by the
accused on the body and that he saw
blood come out just below the right breast
of the deceased. The physical evidence in
this case showed that there was no wound
on the right breast of the deceased nor on
any part of his body. The gunshot wound
sustained by the deceased was only on his
left forearm. Considering that he testified
that there were no other persons there
during the incident except the accused, the
deceased and Cornelio Altejos when the
overwhelming weight of evidence is that
there were a lot of other people during the
incident (this) showed that this witness had
small regard for the truth. 11
Coming back to appellant's representations in
court, his vacillation as to what he allegedly did
after Altejos stabbed the victim is another instance
which renders his version highly suspect. While
stating on direct examination that he ran to the
main road, 12 he claimed on cross-examination that
he only walked a short distance and then went to
the hospital upon seeing that his hand was
wounded. 13 The latter statement is itself
inconsistent with his earlier declaration during the
same proceeding that he was brought by a
policeman to the hospital. 14 This irresolution on
the part of the appellant was obviously to avoid any
imputation of guilt against him arising from his
flight. 15
At any rate, unlawful aggression on the part of the
victim is further negated by the physical evidence
in the case. Again, we quote the trial court with
approval:
The testimony of the accused Gerardo
Sazon that the deceased was armed with
a gun and fired at him is not borne out by
the physical evidence in this case. The
paraffin test conducted on the cadaver of
the deceased showed that the hands of the
deceased were negative for gunpowder
residues indicating that he did not fire a
gun during the incident. The other parts of
his body like his forearm and his abdomen
bore strong traces of gunpowder residues
because of the burst of the gun of the
accused. The court is convinced beyond
reasonable doubt that there was only one
gun during the incident and that the gun
belonged to and/or was used by the
accused Gerardo Sazon. That a part of
one of his fingers was blown off at very
close range, according to Dr. Ely Canja
strongly indicated that the accused
accidentally hit his finger when he and the
deceased grappled for the possession of
the gun. 16
In contrast, appellant was found positive for the
presence of gunpowder residues (nitrates). While
the presence or absence of nitrates cannot indeed
be considered conclusive proof that one has or has
not fired a gun, the following testimony on direct
examination by prosecution witness Zenaida
Sinfuego a forensic chemist whose expertise on
the matter was sufficiently established, yields this
verification:
Atty. E. Original:
Q Now, have you conducted also a paraffin
examination on the person of Wilfredo
Longno?
COURT:
Q On the cadaver?
Atty. E. Original:
Q On the cadaver?
A Yes, Sir.
133
Q Have you brought with you the result of A Last September 18,1983.
that examination?
Q Now before we go on, on that Chemistry
A Yes, Sir. Report which has been marked as Exhibit
'D' regarding the paraffin test conducted
Q Now I have here a carbon original of on the right hand of the accused Gerardo
Chemistry Report No. C-200-83, result of Sazon, your finding there states, positive
the paraffin test on the cadaver of Wilfredo for gunpowder residues, what is the
Longno, please compare this carbon implication?
original to the original copy in your
possession whether it is the same? A The implication states positive, that
Sazon have (sic) fired a gun.
A The same.
Q Within what time-span?
xxx xxx xxx
A Within three days.
Q This report says specimen submitted,
one pair of paraffin casts taken from the Q Within three days?
left and right hands of the cadaver of one
Wilfredo Longno, one piece of paraffin cast A Within three days.
taken from left forearm of same subject
and one piece paraffin last taken from the Q From the examination?
left side of the abdomen. Purpose of
laboratory examination: to determine the
A Three days from the subject firing of a
presence of gunpowder residues (nitrates)
gun.
on the above-mentioned specimens.
Findings, cast from hands-negative for the
presence of gunpowder residues Q And when was the examination
(nitrates). Cast from forearm-positive for conducted?
the presence of gunpowder residues
(nitrates) in the 1 1/2 in, 2 1/2 in, 3 in, and A Last September 19,1983, Your Honor.
4 in radius. Cast from the left side of the
abdomen-positive for the presence of Q September?
gunpowder residues (nitrates) in the
center and in the 1 and 2 in radius. In the A Nineteen.
layman's language Mrs. Sinfuego, will you
please explain to the Honorable Court Q So he could have fired a gun on
these findings 1, 2 and 3? September 17,1983?

A Casts from the hands, negative for the
presence of gunpowder residues that
means that, no blue specks were found in
the hands of the cadaver.
COURT:
Q Before we go on, what is the implication
when the finding is negative?
A I think that depends, Your Honor on the
requesting party.
Q I am asking you if it was possible that he
fired a gun which left the powder burns,
was it possible that he fired a gun on
September 17?
A Yes, Your Honor. 17

A Probably, the subject never fired a gun.
Q Within what time-span?
A The gunpowder will stay only within
three days.
On cross-examination, Sinfuego further testified
as follows:
Q Is it possible for a person who has not
fired a firearm and could be (sic) positive
for nitrates?

Q When was this examination conducted? A Yes, Sir.

134
 Q In what instance?
A For example, if he is near to the person
firing a gun it is possible that it was carried
by the wind.
Q So that is the only case wherein you find
nitrates on the person who has not fired a
gun?
A Also from the fertilizer.
Q You mean, a person handling fertilizers
could also be positive for nitrates?
A Yes, Sir but we have to consider also the
time of reaction, from contaminance (sic)
for the nitrates will take effect between two
to three minutes.
COURT:
Q Can you determine on your examination
whether the nitrates found was (sic) the
nitrates left by gunpowder residues or by
fertilizer can you distinguish that?
A Yes, Sir.
Q And this (sic) nitrates found on the
hands of the accused, could you
determine where did it (sic) come from?
A Gunpowder residues. 18
Parenthetically, it is true that the bad moral
character of the offended party may be proven in
evidence to establish in any reasonable degree
the probability of the offense charged, 19 e.g., the
quarrelsome nature of the victim may tend to
establish that he started the unlawful aggression.
Nonetheless, such evidence, seeking to establish
as it does only a probability, cannot prevail over
facts sufficiently proven by the prosecution during
the trial belying such aggression. These
observations find application in the instant case
where the defense presented and now argue on
character evidence consisting of criminal charges
involving minor offenses which had been filed
against the deceased, but not one of which
resulted in conviction and were in fact dismissed
except for one case which was sent to the
archives. 20
Obviously, whether or not appellant acted in self-
defense is essentially a question of fact. Being so
and in the absence of any showing that the Court a
quo failed to appreciate facts or circumstances of
weight and substance that would have altered its
conclusion, the court below, having seen and
heard the witnesses during the trial, is in a better
position to evaluate their testimonies. No
compelling reason, therefore, lies for this Court to
disturb the trial court's finding that appellant did not
act in self-defense. 21
The Court, however, holds that appellant, albeit
guilty, can only be convicted of homicide and not
murder. The trial court correctly held that the killing
was not accompanied by treachery. It, however,
ruled that there was evident premeditation on the
part of appellant. We find the records sorely
wanting in evidence to support the latter
conclusion.
The fact that appellant told the deceased that he
would kill him and that two days later, after the
deceased passed by the store where appellant
and Altejos were drinking softdrinks the latter
followed the former and inflicted the fatal blows,
cannot adequately sustain a conclusion of
premeditated killing.
To justify its attendance, the prosecution must
prove (1) the time when the offender determined
to commit the crime, (2) an act manifestly
indicating that the culprit has clung to his
determination, and (3) a sufficient lapse of time
between the determination and the execution to
allow him to reflect upon the consequences of his
act. 22
In the case at bar, the first and second elements
are lacking. The angry outburst of appellant in that
incident of September 15, 1983, warning the victim
that the former would kill him, does not convince
us that, under the circumstances therein, appellant
as of that time had already decided to kill the
victim. A homicidal premeditation is studiedly
conceived and not impulsively adopted just like
that and, worse, publicly announced. It was more
of a spontaneous expression of resentment or
bravado on the part of appellant.
Again, the circumstance that appellant and Altejos
were by chance at the store when the victim
passed by cannot be taken as manifestly
indicating that appellant had clung to his
determination to kill the victim. No evidence was
presented to show that appellant purposely waited
there for the deceased. Nor was there any showing
that the deceased frequently passed by the same
route as to warrant and explain appellant's waiting
for the former at that place. Indeed, that the
meeting may have been purely accidental is not a
135
remote possibility. We are more inclined to believe
that it was the belligerent and defiant demeanor of
the victim when confronted by appellant near the
public faucet that precipitated assault.
Under such considerations and there being no
other evidence to prove that the death of the victim
was the result of meditation, calculation or
reflection, evident premeditation cannot be
appreciated to qualify the killing to murder. 23The
circumstances qualifying or aggravating the act
must be proved in an evident and incontestable
manner. They must be proved as conclusively as
the acts constituting the offense.24 Thus, for the
same reason, the aggravating circumstance of
abuse of superior strength cannot be appreciated
in this case. Superior strength may aggravate or
qualify a crime, only if it is clearly shown that there
was deliberate intent to take advantage of it.25 In
the absence of any evidence to show that the
accused purposely sought to use their superior
strength to their advantage in the present case, a
finding to that effect by the trial court cannot be
sustained.
Finally, the fact that appellant did not inflict the
mortal wound upon the deceased is of no moment,
since the existence of conspiracy was
satisfactorily shown by the evidence. The
coordinated acts of appellant and Altejos of
immediately following the victim and jointly
confronting him thereafter reveal a concordance
and unity of thought which resulted in the
encounter. The circumstances that after the
accused shot the victim in the forearm and, while
he and the victim were grappling for appellant's
gun, Altejos stabbed the victim to death, indicate
closeness and coordination of their action geared
towards a common purpose, that is, to kill the
victim. 26 Proof of a previous agreement to commit
the crime is not absolutely essential to establish a
conspiracy. It is sufficient that the accused be
shown to have acted in concert pursuant to the
same objective, 27 as such circumstance is
invariably indicative of a conspiratorial agreement.
It bears mention, at this point, that while we have
ruled out evident premeditation in the case, this
does not negate the existence of a conspiracy.
True, conspiracy generally involves evident
premeditation, but this circumstance requires for
its raison d' etre a sufficient time in a juridical
sense for the accused to meditate and reflect on
the consequences of his intended action. Such
time element is not an indispensable requirement
for a conspiracy to exist. 28 Consequently, we find
that there was a conspiracy between appellant and
Altejos although, for lack of conclusive showing,
we cannot consider evident premeditation against
appellant.
The rule is that where a conspiracy is proven, a
showing as to who inflicted the fatal wound is not
required to sustain a conviction. 29 The act of one
in killing the victim becomes the act of all the
accused. Insofar as Cornelio Altejos is concerned,
however, the trial court never acquired jurisdiction
over him and he can neither be convicted nor
exculpated herein. References in this judgment to
him are, therefore, obiter and with no binding
effect on him. 30
WHEREFORE, the judgment of the trial court is
MODIFIED. Accused-appellant Gerardo Sazon is
declared GUILTY beyond reasonable doubt of the
crime of homicide and is hereby sentenced to
suffer the indeterminate penalty of eight (8) years
and one (1) day of prision mayor to fourteen (14)
years, eight (8) months and one (1) day
of reclusion temporal.
The award by the lower court of the items of civil
liability to be paid by accused-appellant to the heirs
of the deceased is hereby MODIFIED by
disallowing the grant of attorney's fees for lack of
basis, and increasing the death indemnity to
P50,000.00 in accordance with the policy adopted
by the Court en banc on August 30,1990.
SO ORDERED.
Melencio-Herrera (Chairman), Padilla and
Sarmiento, JJ., concur.
Paras, J., is on leave.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-25913 February 29, 1969
HEIRS OF RAYMUNDO CASTRO, petitioners,
vs.
APOLONIO BUSTOS, respondent.
Sotto, Consengco and Dizon for petitioners.
Sipin, Abarcar and Baluyot for respondent.
BARREDO, J.:
Appeal from the Court of Appeals.
136
Respondent Apolonio Bustos was charged in the
Court of First Instance of Pampanga on October
26, 1962 with the crime of murder for the killing of
Raymundo Castro whose heirs are now the
petitioners. The trial court found Bustos guilty only
of homicide and, crediting him with two mitigating
circumstances, namely, passion or obfuscation
and voluntary surrender, sentenced him to an
indeterminate prison term of 2 years, 4 months and
1 day of prision correccional, as minimum, to 8
years and 1 day of prision mayor, as maximum,
and to indemnify the petitioners, who were
represented in the case by a private prosecutor, in
the sum of six thousand pesos (P6,000) "without
prejudice to whatever the accused (respondent) is
entitled from the Government Service Insurance
System (GSIS) for his services of around twenty-
six (26) years as a public school teacher, prior to
October 20, 1962." Both respondent and
petitioners appealed to the Court of Appeals,
respondent asking that appellate, court acquit him
and petitioners praying, on the other hand, that
respondent be convicted of murder, that the
portion regarding what said respondent will
receive from the GSIS be deleted and that he be
ordered to pay petitioners "the aggregate sum of
P50,764.00 as indemnity and actual, moral,
temperate and exemplary damages." For the
purposes of their appeal, petitioners even filed
unnecessarily a printed record on appeal. On
October 18, 1965, the Court of Appeals rendered
judgment modifying that of the trial court insofar as
it concerned (1) the amount of damages to be
awarded petitioners thus:
... Aside from the P6,000 indemnity
awarded by the trial court, which we
uphold, we feel justified, in the exercise of
our discretion, to award to the heirs of the
deceased moral damages in the amount of
P6,000 plus P13,380.00 to compensate for
the loss of earning of the decedent at the
annual salary of P2,676.00 ....
and (2) the mitigating circumstance of
"obfuscation", appreciated as such by the trial
court, which was changed to "vindication of a
grave offense", but affirming it in all other respects.
Upon motion, however, of respondent for the
reconsideration of said decision, reiterating his
plea for acquittal, or, in the alternative, praying for
the elimination of the award of moral and
compensatory damages, the Court of Appeals
promulgated on November 13, 1965, an amended
decision, the pertinent portions of which are:
The arguments interposed by the
appellant in his Motion for consideration to
support the complete reversal of the
judgment appealed from, have been
considered and passed upon in our
decision, and we see no reason to alter the
same in so far as the appellant's guilt of the
crime is concerned. On the other hand, we
agree with the appellant that in the interest
of justice and equity and in view of the
presence of two mitigating circumstances,
without any aggravating one to offset
them, the award of moral and
compensatory damages should be
eliminated.
WHEREFORE, the decision promulgated
October 18, 1965, is hereby amended by
eliminating therefrom the award of
P6,000.00 representing moral damages,
and of P13,380.00 representing the
decedent's loss of earnings.
From this amended decision, only petitioners have
appealed to Us. The prayer in their petition for
certiorari asks for nothing more than that the
amended decision of the Court of Appeals be
revoked and reversed, and its original decision be
affirmed in toto insofar as the award of indemnity
and damages is concerned. Since We find the
grounds of the appeal meritorious, We grant fully
the prayer in the petition.
This case affords this Court as appropriate an
opportunity, as any other, to restate, in a more
comprehensive way, the law regarding the items
of damages that are recoverable in cases of death
caused by a crime, whether the claim therefor is
made in the criminal proceedings itself or in a
separate civil action. In the instant case, recovery
of such damages is being sought in the criminal
proceedings but even if it were claimed otherwise,
the indemnity and damages would be the same,
for generally, the items of damages are identical in
both procedures, except with respect to attorney's
fees and expenses of litigation which can be
awarded only when a separate civil action is
instituted. (Art. 2208, Civil Code) With the
clarifications We are making herein, at least the
writer of this opinion expects that litigations
regarding the aspects of the law herein passed
upon may be minimized.
As a start, it is to be noted that in the matter of
damages, the original decision of the Court of
Appeals, while correct in making a particularization
in the award of indemnity and damages,
nonetheless, still failed to comply strictly with the
constitutional requirement that all decisions of
courts of record must state both the facts and
the law on which they are based. (Sec. 12, Art.
137
VIII, Constitution) In said original decision, the
Court of Appeals held:
Coming now to the damages asked by the
heirs of the deceased: Aside from the
P6,000.00 indemnity awarded by the trial
court which we uphold, we feel justified, in
the exercise of our discretion, to award to
the heirs of the deceased moral damages
in the amount of P6,000 plus P13,380.00
to compensate for the loss of earning of
the decedent at the annual salary of
P2,676.00 (Exh. V; p. 42 t.s.n. Vergara).
WHEREFORE, the appealed judgment is
modified as above indicated in so far as it
concerns the amount of indemnity and
damages to be awarded to the heirs of the
deceased, and the mitigating
circumstance of vindication of a grave
offense which takes the place of the
circumstance of obfuscation appreciated
by the trial court; and affirmed in all other
respects. Costs against the appellant.
As can be seen, no legal or factual basis is stated
therein for the award of indemnity and damages to
petitioners; worse, the impression is given that the
said award is purely a matter of discretion on the
part of the court. Clearly, this is not in accordance
with the law. Indeed, it must have been this failure
to refer to the pertinent legal provisions which
induced the appellate court, at the mere invocation
by respondent of Art. 2204 of the Civil Code, to
commit the error of readily eliminating in the
amended decision the items on moral damages
and compensation for loss of earning of the
decedent which its original decision had correctly
contained. Having held that it had discretion in the
premises, the court easily yielded to the argument
that simply because it had credited the respondent
with two mitigating circumstances, it was already
justified in eliminating the items of damages
already adverted to, presumably having in mind
said Art. 2204 which provides that:
In crimes, the damages to be adjudicated
may be respectively increased or lessened
according to the aggravating or mitigating
circumstances.
Of course, this was clear error, inasmuch as
construed literally or otherwise, the quoted
provision does not warrant a complete deletion of
said items of damages. In any event the court
evidently failed to take into account that several
other provisions can come into play considering
the circumstances in this case.
When the commission of a crime results in death,
the civil obligations arising therefrom are governed
by the penal laws, "... subject to the provisions of
Art. 2177, and of the pertinent provisions of
Chapter 2, Preliminary Title on Human Relations,
and of Title XVIII of this Book (Book IV) regulating
damages." (Art. 1161, Civil Code)
Thus, "every person criminally liable for a felony is
also civily liable." (Art. 100, Revised Penal Code).
This civil liability, in case the felony involves death,
includes indemnification for consequential
damages (Art. 104, id.) and said consequential
damages in turn include "... those suffered by his
family or by a third person by reason of the crime."
(Art. 107, id.) Since these provisions are subject,
however, as above indicated, to certain provisions
of the Civil Code, We will now turn to said
provisions.
The general rule in the Civil Code is that:
In crimes and quasi-delicts, the defendant
shall be liable for all damages which are
the natural and probable consequences of
the act or omission complained of. It is not
necessary that such damages have been
foreseen or could have reasonably been
foreseen by the defendant. (Art. 2202)
When, however, the crime committed involves
death, there is Art. 2206 which provides thus:
The amount of damages for death caused
by a crime or quasi-delict shall be at least
three thousand pesos, even though there
may have been mitigating circumstances.
In addition:
(1) The defendant shall be liable for the
loss of the earning capacity of the
deceased, and the indemnity shall be paid
to the heirs of the latter; such indemnity
shall in every case be assessed and
awarded by the court, unless the
deceased on account of permanent
physical disability not caused by the
defendant, had no earning capacity at the
time of his death;
(2) If the deceased was obliged to give
support according to the provisions of
article 291, the recipient who is not an heir
called to the decedent's inheritance by law
of testate or intestate succession may
demand support from the person causing
the death, for a period not exceeding five
138
 years, the exact duration to be fixed by the
court;
(3) The spouse, legitimate and illegitimate
descendants and ascendants of the
deceased may demand moral damages
for mental anguish by reason of the death
of the deceased.
The amount of P3,000 referred to in the above
article has already been increased by this Court
first, to P6,000.00 in People v. Amansec, 80 Phil.
426, and lately to P12,000.00 in the case
of People v. Pantoja, G. R. No. L-18793,
promulgated October 11, 1968, and it must be
stressed that this amount, as well as the amount
of moral damages, may be adjudicated even
without proof of pecuniary loss, the assessment of
the moral damages being "left to the discretion of
the court, according to the circumstances of each
case." (Art. 2216)
Exemplary damages may also be imposed as a
part of this civil liability when the crime has been
committed with one or more aggravating
circumstances, such damages being "separate
and distinct from fines and shall be paid to the
offended party," (Art. 2230). Exemplary damages
cannot however be recovered as a matter of right;
the court will decide whether or not they should be
given. (Art. 2233)
In any event, save as expressly provided in
connection with the indemnity for the sole fact of
death (1st par., Art. 2206) and in cases wherein
exemplary damages are awarded precisely
because of the attendance of aggravating
circumstances, (Art. 2230) "... damages to be
adjudicated may be respectively increased or
lessened according to the aggravating or
mitigating circumstances," (Art. 2204) but "the
party suffering the loss or injury must exercise the
diligence of a good father of a family to minimize
the damages resulting from the act or omisson in
question." (Art. 2203) "Interest as a part of the
damages, may, in a proper case, be adjudicated in
the discretion of the Court." (Art. 2211) As to
attorneys' fees and expenses of litigation, the
same may be recovered only when exemplary
damages have been granted (Art. 2208, par. 1) or,
as We have already stated, when there is a
separate civil action.
Stated differently, when death occurs as a result of
a crime, the heirs of the deceased are entitled to
the following items of damages:
In the light of the foregoing discussion, it is clear
that the Court of Appeals erred in eliminating in its
1. As indemnity for the death of the victim
of the offense — P12,000.00, without the
need of any evidence or proof of damages,
and even though there may have been
mitigating circumstances attending the
commission of the offense.
2. As indemnity for loss of earning capacity
of the deceased — an amount to be fixed
by the Court according to the
circumstances of the deceased related to
his actual income at the time of death and
his probable life expectancy, the said
indemnity to be assessed and awarded by
the court as a matter of duty, unless the
deceased had no earning capacity at said
time on account of permanent disability not
caused by the accused. If the deceased
was obliged to give support, under Art.
291, Civil Code, the recipient who is not an
heir, may demand support from the
accused for not more than five years, the
exact duration to be fixed by the court.
3. As moral damages for mental anguish,
— an amount to be fixed by the court. This
may be recovered even by the illegitimate
descendants and ascendants of the
deceased.
4. As exemplary damages, when the crime
is attended by one or more aggravating
circumstances, — an amount to be fixed in
the discretion of the court, the same to be
considered separate from fines.
5. As attorney's fees and expresses of
litigation, — the actual amount thereof,
(but only when a separate civil action to
recover civil liability has been filed or when
exemplary damages are awarded).
6. Interests in the proper cases.
7. It must be emphasized that the
indemnities for loss of earning capacity of
the deceased and for moral damages
are recoverable separately from and in
addition to the fixed sum of P12,000.00
corresponding to the indemnity for the sole
fact of death, and that these damages
may, however, be respectively increased
or lessened according to the mitigating or
aggravating circumstances, except items 1
and 4 above, for obvious reasons.
139
amended decision, the items of moral damages
and compensation for loss of earning capacity of
the deceased. Indeed, as to the award of moral
damages in case of death, this Court has already
held in Mercado v. Lira, etc., G. R. Nos. L-13328-
29, September 29, 1961, that once the heirs of the
deceased claim moral damages and are able to
prove they are entitled thereto, it becomes the duty
of the court to make the award. We held:
Art. 2206 states further that "In addition" to
the amount of at least P3,000.00 to be
awarded for the death of a passenger, the
spouse, legitimate and illegitimate
descendants and ascendants of the
deceased may demand moral damages as
a consequence of the death of their
deceased kin, which simply means that
once the above-mentioned heirs of the
deceased claim compensation for moral
damages and are able to prove that they
are entitled to such award, it becomes the
duty of the court to award moral damages
to the claimant in an amount
commensurate with the mental anguish
suffered by them.
This doctrine was reiterated in Maranan v. Perez,
G. R. No. L-22272, June 26, 1967:
In connection with the award of damages,
the court a quo granted only P3,000 to
plaintiff-appellant. This is the minimum
compensatory damages amount
recoverable under Art. 1764 in connection
with Art. 2206 of the Civil Code when a
breach of contract results in the
passenger's death. As has been the policy
followed by this Court, this minimal award
should be increased to P6,000 .... Still, Art.
2206 and 1764 award moral damages in
addition to compensatory damages, to the
parents of the passenger killed to
compensate for the mental anguish they
suffered. A claim therefor, having been
properly made, it becomes the court's duty
to award moral damages. Plaintiff
demands P5,000 as moral damages;
however, in the circumstances, We
consider P3,000 moral damages, in
addition to the P6,000 damages
aforestated, as sufficient. Interest upon
such damages are also due to plaintiff-
appellant.
Likewise, in the matter of the compensatory
damages for the loss of earning capacity of the
deceased, We also held in the case of Daniel
Bulante v. Chu Liante, G.R. Nos. L- 21583 and L-
21591-92, May 20, 1968 that:
The next item objected to refers to the
damages awarded to the heirs of the
deceased passengers for loss of earning
capacity, separately from the indemnities
by reason of death. The ground for the
objection is that loss of earning capacity
was not specifically pleaded or claimed in
the complaint. This item, however, may be
considered included in the prayer for
"actual damages" and for other "just and
equitable reliefs", especially if taken in the
light of Art. 2206, in connection with Art.
1764, of the Civil Code, which allows, in
addition to an indemnity of at least P3,000
by reason of death, recovery for loss of
earning capacity on the part of the
deceased, the same to be paid to his heirs
"in every case ... unless the deceased on
account of permanent physical disability
not caused by the defendant, had no
earning capacity at the time of his death."
To be sure, these cases of Mercado v.
Lira, Maranan v. Perez and Bulante v. Chu
Liante from which We have quoted, were actions
based on contracts of common carriers. But the
above-mentioned doctrines are equally applicable
to civil liability ex delicto because, after all, Art.
2206 of the Civil Code which was applied in said
cases is precisely the provision pertinent to liability
arising from crimes (and quasi-delicts). No doubt,
said Article must have been relied upon by the
court in the above cases only because Art. 1764 of
the Civil Code provides that said "Art. 2206 shall
also apply to the death of a passenger caused by
the breach of contract of a common carrier."
Accordingly, the interpretation given to said article
in those cases are applicable to the case at bar. In
other words, this must be so because under the
Civil Code, the same rules on damages are
generally to be observed, whether death results
from a crime or a quasi-delict or a breach of the
contract of common carriage.
As to the amount of the indemnity for moral
damages and loss of earning capacity of the
deceased in the present case, the original decision
of the Court of Appeals awarding them, does not
afford sufficient basis for Us to increase the
amounts fixed by said court, as prayed for by
appellants. As has already been stated, the said
decision failed to follow the Constitution, not only
in not stating the law on which it is based but also
in not making the necessary findings of fact on
which it based its discretion in fixing the respective
amounts it awarded for moral and compensatory
140
damages. Legally, therefore, We can, if We wish
to, return this case to that court for it to supply
these constitutional omissions. We opt however, to
save time and further difficulties for and damages
to, the petitioners. Extant in the records before Us
is the fact that the respondent has never disputed
that petitioners are the widow and seven children
of the deceased, three of whom were still minors
at the time of his death, nor that the said deceased
was a public school teacher, 56 years old, and
earning P2,276.00 a year. These facts appear to
have been repeatedly asserted in the briefs of
petitioners in the Court of Appeals and in this
Court. No denial was ever made by the
respondent. When respondent moved for the
reconsideration of the original decision of the
Court of Appeals, (Annex E of Petition
for Certiorari) he only argued that in view of the
mitigating circumstances credited to him by said
court, petitioners were not entitled to moral
damages and to indemnity for loss of earning
capacity of the deceased; the amounts fixed
therefor by said court — he never questioned.
When petitioners filed their motion for
reconsideration of the amended decision of the
Court of Appeals, these facts (relationship,
earnings, etc.) were reiterated. (Annex G, id.)
Respondent did not file any answer to said motion
despite the resolution requiring him to do so. (Par.
12, Petition for Certiorari) Neither has respondent
filed any brief in the present instance,
notwithstanding repeated requests on his part for
extension to file the same, which, incidentally,
were all granted. Under these circumstances, We
feel justified in brushing aside strict technicalities
of procedure in order to accomplish substantial
justice more expeditiously. Anyway, as We said at
the outset, petitioners are asking Us, in the prayer
of their petition for certiorari, for nothing more than
to affirm "in toto" the original decision of the Court
of Appeals, and in their lone assignment of error in
the present instance, their only claim is that "the
Court of Appeals erred when it issued the
amended decision eliminating the award of P6,000
moral damages and the award of P13,380.00 loss
of earnings of the deceased Raymundo Castro." In
these circumstances, even if We should award the
amounts of damages just mentioned, inspite of the
absence of the pertinent findings of fact by the
Court of Appeals, We would not have to reach
beyond amounts that are undisputed by the
respondent.
We, therefore, overrule the prayer for additional
damages in petitioners' brief and We hold that, on
the basis of the facts not questioned by
respondent, they are entitled only to the P6,000.00
as moral damages and the P13,380.00 as
compensatory damages for the loss of earning
capacity of the deceased awarded in the original
decision of the Court of Appeals in addition, of
course, to the indemnity for death fixed also by
said court at P6,000.00. This amount of P6,000.00
We cannot increase to P12,000.00, as allowed
in People v. Pantoja, supra, and the subsequent
cases, (People v. Mongaya G. R. No. L-23708,
October 31, 1968, and People v. Ramos, G. R. No.
L-19143, November 29, 1968) because in the
instant suit, neither party has appealed in relation
thereto. This case is now before Us on appeal by
the offended party only as to specific portions of
the civil indemnity to be paid by the respondent. It
would have been different if the whole criminal
case were up for our review because then, even
without any appeal on the part of the offended
party, We could have still increased the said
liability of the accused, here-in respondent. (See
Mercado v. Lira, supra.)
At this juncture, for the guidance of parties similarly
situated as petitioners herein, and so that there
may be no useless expenses in appeals by
offended parties in regard to the civil aspect of a
criminal case when no separate civil action has
been filed by them, it should be made clear that
when there is no such separate civil action and the
claim for civil indemnity is joined with the criminal
case, no record on appeal, whether printed,
typewritten or mimeographed, is necessary,
except perhaps when formal pleading raising
complicated questions are filed in connection
therewith, and still, this would be purely optional on
the appellant because anyway the whole original
record of the case is elevated in appeals in criminal
cases. It is already settled that appeals relating to
the civil aspects of a criminal case should follow
the procedure for appeal required by rules of
criminal procedure. (People vs. Lorredo, 50 Phil.
209, 220-221; People v. ViIlanueva, G.R. No. L-
18769, May 27, 1966) lawphi 1.nêt
WHEREFORE, the amended decision of the Court
of Appeals is modified as hereinabove indicated,
in so far as the civil liability of respondent is
concerned, with costs against him in this instance.
Dizon, Makalintal, Zaldivar, Fernando and
Teehankee, JJ., concur.
Concepcion, C.J., Reyes, J.B.L. and Sanchez, JJ.,
concur in the result.
Castro, J., reserves his vote.
141
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-22183 August 30, 1968
THE RECEIVER FOR NORTH NEGROS
SUGAR COMPANY, INC., petitioner,
vs.
PEDRO V. YBAÑEZ ET AL., respondents.
Ross, Selph and Carrascoso for petitioner.
Pedro V. Ibañez in his own behalf as respondent.
Jose Ma. Lopez Vito for other respondents.
ZALDIVAR, J.:
A petition for review of the decision of the Court of
Appeal, rendered on October 14, 1963, in CA-G.R.
No. 28608-R, entitled "Pedro V. Ybañez, and
Rosario V. Ybañez, represented by her legal
guardian, Pedro V. Ybañez, plaintiffs-appellants,
versus North Negros Sugar Company, Inc.,
Primitivo Gustilo, and Loreto Perez, defendants-
appellees."
Plaintiffs-appellants Pedro V. Ybañez and Rosario
V. Ybañez, named respondents in the instant
petition,1 are the brother and sister, respectively,
and immediate heirs of Cesar V. Ybañez who was
one of two persons who died as a result of the
collision between the car, where said Cesar V.
Ybañez was riding and being driven by Gil
Dominguez, and train No. 5, owned by the North
Negros Sugar Company, Inc., in the evening of
August 31, 1937 in the railroad intersection at
Hacienda Santa Teresa, Manapla, Occidental
Negros, while the car was on its way from Bacolod
City to Cadiz. Criminal prosecution for double
homicide and serious physical injuries through
reckless imprudence was instituted against Gil
Dominguez, driver of the car, and Primitivo Gustilo
and Loreto Perez, operator and brakeman,
respectively, of the locomotive. The offended
parties reserved their right to institute separate
civil actions for damages. Primitivo Gustilo and
Loreto Perez were tried together and acquitted of
the crime charged. Gil Dominguez was also
acquitted in a separate trial.
Thereafter, a civil action based on culpa aquiliana
was instituted, on May 15, 1940, in the Court of
First Instance of Negros Occidental by Pedro V.
Ybañez and Rosario V. Ybañez against Primitivo
Gustilo, Loreto Perez, and their employer, North
Negros Sugar Company, Inc., docketed as Civil
Case No. 8367, seeking to recover damages for
the death of the deceased. In their answer,
defendants interposed as special defense the
previous acquittal of defendants Primitivo Gustilo
and Loreto Perez in the criminal case, and prayed
for the dismissal of the complaint.
At the pre-trial, on August 5, 1940, the parties
agreed to reproduce in the civil case all the
evidence submitted in the criminal case, as well as
the decision in and the transcript of the
stenographic notes taken during the trial of, the
criminal case. Defendants filed a motion for
summary judgment, praying for the dismissal of
the civil case. The trial court, without any further
hearing, considered the case submitted, and
rendered a decision dismissing the case. Appeal
was taken by the plaintiffs to the Court of Appeals,
but the appeal was certified to this Court on the
ground that the appeal merely involved questions
of law. This Court, in G.R. No. L-6790, on March
28, 1955, reversed the decision of the lower court
and remanded the case for further proceedings.
During the pendency of the case in the lower court,
plaintiff Rosario V. Ybañez died, leaving as her
only heir, co-plaintiff Pedro V. Ybañez, to continue
the case. On the other hand, the North Negros
Sugar Company, Inc. was dissolved and was
accordingly substituted by its receiver Dr. Claudio
R. Luzurriaga. One of the defendants, Loreto
Perez, also died in the interim and the case against
him was dismissed.
After having received additional evidence, the
Court of First Instance of Negros Occidental
rendered judgment, on July 23, 1958, dismissing
the case anew. Appeal was taken by plaintiff Pedro
V. Ybañez to this Court, docketed as G.R. No. L-
14849, but because questions of fact were
involved, and the amount involved was less than
P200,000, the case was certified, on August 25,
1960, to the Court of Appeals and docketed in the
latter court as Case No. 28608-R.
The Court of Appeals, on October 14, 1963,
reversed the judgment of the lower court and held
the North Negros Sugar Company, Inc. liable for
the death of Cesar V. Ybañez, ordering it to pay
plaintiff-appellant Pedro V. Ybañez damages
consisting of P9,600.00 as compensatory
damages for lost earnings of the deceased;
P6,000.00 for death indemnity; P1,000.00 for
funeral expenses; P5,000.00 "as moral damages
for the mental anguish suffered by the heir";
P5,000.00 "for attorney's fees, considering the
years and extensive work — the protracted
litigation had taken;"2 and costs. A motion for
142
reconsideration filed by defendant North Negros
Sugar Company, Inc., upon the grounds, among
others, that the awards of moral damages and
attorney's fees were not warranted under the law
and the circumstances attending the litigation, was
denied. Hence this petition for review.
In this appeal, or petition for review petitioner limits
itself to questioning the correctness of the decision
of the Court of Appeals in so far as it awards moral
damages and attorney's fees. In its brief, petitioner
contents that the Court of Appeals erred:
1. "in ordering petitioner to pay P5,000 "as moral
damages for mental anguish suffered" by plaintiffs
who were brother and sister of the deceased"; and
2. "in awarding attorney's fees in the sum of
P5,000 to the heirs of the deceased."3
1. In support of the first assignment of error,
petitioner cites paragraph 3 of Article 2206 of the
new Civil Code, which provides that in case of
death caused by a crime or quasi-delict, only the
spouse, legitimate and illegitimate descendants
and ascendants of the deceased may demand
moral damages for mental anguish by reason of
the death of the deceased. Petitioner urges that in
the instant case the heirs of the deceased Cesar
V. Ybañez, being his brother, Pedro V. Ybañez,
and his sister, Rosario V. Ybañez (now deceased),
are not among those entitled to moral damages;
consequently, the award to them of moral
damages was not authorized by law.
Respondent Pedro V. Ybañez, on the contrary,
contends that the law applicable is in the old Civil
Code, and not Article 2206 of the new Civil Code,
because the accident that caused the death
happened in 1937, and the case was filed in 1940.
Said respondent maintains that the award of moral
damages is authorized particularly under Articles
1902, 1903, 1103, 1104, 1106 and 1107 of the old
Civil Code, and as ruled by this Court in the
decisions in Lilius vs. Manila Railroad;4 Gutierrez
vs. Gutierrez;5 and Castro vs. Acro Taxicab
Inc.6 Moral damages, respondent urges, should be
paid to the injured person; but if the injured person
died as a consequence of the culpable act and the
victim left no descendants or ascendants, the
damages must be paid — taking into consideration
the principles of the general law on damages, of
the law on succession, and the fact that under the
old Civil Code no specific persons are indicated to
be the only ones entitled to recover moral
damages — to the heirs or next of kin of the victim.
Respondent further cites the rulings of this Court
in the cases of Bernal vs. House, et al.7; Astudillo
vs. Manila Electric Co.8; and Manzanares vs.
Moreta9, wherein the fact of heirship, as viewed
from the general principle of succession of the
deceased victim, was taken into consideration in
determining who would be paid the indemnity for
damages.
In reply, petitioner points out that although the
cases cited by respondent show that moral
damages were awarded even before the new Civil
Code took effect, in none of the cases cited,
however, were moral damages awarded to a
brother or sister of the deceased, but only to either
the victim himself, the surviving spouses, the
children or the parents.
To resolve the issue, we have to determine, what
law is a applicable — whether the provisions of the
old Civil Code or of the new Civil Code. We believe
that the old Civil Code is the law applicable to the
case at bar, subject to such modifications as are
suggested, or are warranted, under the transitional
provisions of the new Civil Code, as we may show
at the later part of this opinion. This is so, because
the acts and events that gave rise to the instant
action took place in 1937, and the action was
commenced in 1940. Article 2253 of the new Civil
Code, provides:
The Civil Code of 1889 and other previous
laws shall govern rights originating, under
said laws, from acts done or events which
took place under their regime; even though
this Code may regulate them in a different
manner, or may not recognize them . . . .
The pertinent provisions of the old Civil Code are
Articles 1902 and 1903. The first article provides:
Art. 1902. Any person who by act or
omission causes damage to another by his
fault or negligence shall be liable for the
damage so done.
and the second article in part, provides:
Art. 1903. The obligation imposed by the
next preceding article is enforcible not only
for personal acts and omissions, but also
for those of persons for whom another is
responsible.
xxx xxx xxx
Owners or directors of an establishment or
business are equally liable for any
damages caused by their employees while
engaged in the branch of the service in
143
 which employed, or on the occasion of the
performance of their duties.
This Court said: "Article 1902 of the Civil Code
declares that any person who by an act or
omission, characterized by fault or negligence,
causes damage to another shall be liable for the
damage done . . . a person is liable for damage
done to another by any culpable act; and by
culpable act is meant any act which is
blameworthy when judged by accepted legal
standards. The idea thus expressed is
undoubtedly broad enough to include any rational
conception of liability for the tortious acts likely to
be developed in any society." 10 The word
"damage" in said article, comprehending as it does
all that are embraced in its meaning, includes any
and all damages that a human being may suffer in
any and all the manifestations of his life: physical
or material, moral or psychological, mental or
spiritual, financial, economic, social, political, and
religious. 11
It is particularly noticeable that Article 1902
stresses the passive subject of the obligation to
pay damages caused by his fault or negligence.
The article does not limit or specify the active
subjects, much less the relation that must exist
between the victim of the culpa aquiliana and the
person who may recover damages, thus
warranting the inference that, in principle, anybody
who suffers any damage from culpa
aquiliana whether a relative or not of the victim,
may recover damages from the person
responsible therefor. This Court had granted moral
damages not only to the person who himself was
injured, 12 but also to the legitimate children and
heirs of the deceased. 13 Parents, even natural,
have also been awarded damages for the death of
their children. 14
We have not come across, and herein respondent
has not cited, any case in this jurisdiction where a
brother and/or sister of the victim of culpa
aquiliana was awarded moral damages. In our
search for persuasive authority, however, we
came across decisions by the courts of France
whose Civil Code, in its article 1383, provides
substantially the same as article 1902 of the Civil
Code of Spain, as follows:
Cada uno es responsable del daño que ha
causado no solamente por su hecho, sino
tambien por su negligencia o por su
imprudencia. (Ripert and
Boulanger, Tratado de Derecho Civil, Vol.
V, 2nd part, p. 50).
On the basis of the above-quoted article, in
France, moral damages for mental anguish
(sentimientos afectivos) have been awarded not
only to parents, children and spouse, of the victim
of culpa aquiliana but also to brothers and sisters,
natural grandparents, and godchildren. 15
We thus see that a provision in the Civil Code of
France which is substantially similar to the
provision of the Civil Code of Spain, relating
to culpa aquiliana is so applied by the courts of
France as to hold a person guilty of culpa
aquiliana liable for moral damages to the person
injured, or to his spouse, children, parents,
brothers and sisters, and even to godchildren. If
the provision of our old Civil Code — which was
itself the Civil Code of Spain of 1889 — relating
to culpa aquiliana were to be applied as it had
been applied in France, then the person guilty
of culpa aquiliana under our old Civil Code would
be liable for moral damages to the person injured,
or to his spouse, children, parents, brothers and
sisters and even to his godchildren. This would
mean that under our old Civil Code the liability for
moral damages for mental anguish due to culpa
aquiliana was to more persons than what our new
Civil Code now provides in its Article 2206 which
limits the liability for moral damages to the spouse
and legitimate and illegitimate descendants and
ascendants of the deceased. And so, under the
new Civil Code, a less severe sanction — at least
as regards the persons entitled to moral damages
— is provided for, than under the old Civil Code.
Article 2257 of the new Civil Code — one of the
transitional provisions — provides as follows:
Art. 2257. Provisions of this Code which
attach a civil sanction or penalty or a
deprivation of rights to acts or omissions
which were not penalized by the former
laws, are not applicable to those who,
when said laws were in force, may have
executed the act or incurred in the
omission forbidden or condemned by this
Code.
If the fault is also punished by the previous
legislation, the less severe sanction shall
be applied.
xxx xxx xxx
(Emphasis supplied.)
It may well be said that culpa aquiliana, or quasi-
delict, is punished both by the old Civil Code — the
previous legislation — and by the new Civil Code.
144
But, as we have pointed out, a less severe
sanction, or penalty, for culpa aquiliana is
provided for in the new Civil Code. It follows,
therefore, that Article 2206 of the new Civil Code
— which provides that only the spouse, legitimate
and illegitimate descendants and ascendants may
demand moral damages for mental anguish by
reason of the death of the deceased caused
by quasi-delict — should be applied in the instant
case. Hence, petitioner herein, who claims moral
damages for the death of his brother Cesar V.
Ybañez caused by quasi-delict, is not entitled to,
and should not have been awarded, moral
damages, by the Court of Appeals. 16
2. Regarding the second error assigned, petitioner
argues that the Court of Appeals had no special
reason for awarding attorney's fees because the
petitioner had not acted in gross and evident bad
faith in resisting respondent's claims for damages,
and the claims of respondent herein could not be
characterized as "plainly valid, just and
demandable" claims as contemplated under
paragraph (5) of Article 2208 of the new Civil
Code, considering that the two employees, for
whose alleged negligent acts herein petitioner is
made to answer, were acquitted in the criminal
case, and the civil case for damages was
dismissed by the trial court.
Respondent, on the other hand, argues that the
Court of Appeals gave as reason for the award of
attorney's fees: "considering the years and
extensive work — the protracted litigation had
taken." Respondent also maintains that the award
must have been based by the Court of Appeals on
Article 2208 (11) and Article 2253 of the new Civil
Code.
But petitioner urges that the issue is whether or not
attorney's fees might be recovered, and not the
amount of attorney's fees in the determination of
which the long years of litigation given as reason
by the Court of Appeals would be pertinent.
Respondent's argument that the award of
attorney's fees was justified under Article 2208
(11) of the new Civil Code is untenable, because
the instant case was filed on May 15, 1940, or
before the effectivity of the new Civil Code. This
Court, in the case of Bureau of Lands vs. Samia,
et al., 17 held:
That portion of the decision which awards
P10,000 to respondents as attorney's fees
is untenable. Although courts have, under
paragraph (11) of Article 2208 of the Civil
Code, authority to award attorney's fees
whenever it may be "just and equitable,"
said provision is inapplicable to the
present case, the same having been
instituted before the effectivity of the said
Code.
The refusal of herein petitioner to pay the damages
asked, although the case was finally decided
against it, cannot be said to have been caused by
bad faith. In the case of George Edward Koster
Inc. vs. Zulueta, 18 this Court said:
At common law, the successful party
usually has no right to have the fees of his
attorney, as such, taxed against his
opponent (14 L. ed. 181). The Court will
not ordinarily allow counsel fees to the
successful party. Each party to the action
must pay his own lawyer . . . . Counsel fees
paid in prior action have been allowed . . .
(where) the conduct of the party against
whom they were allowed, so directly and
certainly caused the expenditure for this
purpose, that the loss of the amount so
paid was easily within such causal
relations to the defendant's wrong as to
warrant the assessment of the damages in
compensation for it (Sears vs. Inhabitants
of Nahant, 102 N. E. 491.). Our rulings
before the New Civil Code took effect (the
present case having arisen before) have
been as follows:
"It is not sound public policy to
place a penalty on the right to
litigate. To compel the defeated
party to pay the fees of counsel for
his successful opponent would
throw wide the door of temptation
to the opposing party and his
counsel to swell the fees to undue
proportions, and to apportion them
arbitrarily between those
pertaining properly to one branch
of the case from the other.
"This Court has already placed
itself on record as favoring the
view taken by those courts which
hold that attorney's fees are not a
proper element of damages." (Tan
Ti vs. Alvear, 26 Phil. 566; The
Borden Co. vs. Doctors
Pharmaceuticals, Inc., 90 Phil.
500).
". . . Counsel fees, other than those
fixed in the rules as costs, are not
145
 an element of recoverable
damages." (Jesswani vs.
Masaram Dialdas, G.R. No. L-
4651, May 12, 1952)."
WHEREFORE, the decision of the Court of
Appeals sought to be reviewed should be, as it is
hereby, modified by eliminating therefrom the
award of P5,000.00 for moral damages for mental
anguish suffered by the heir, and the award of
P5,000.00 for attorney's fees. No pronouncement
as to costs. It is so ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon,
Makalintal, Sanchez, Castro, Angeles and
Fernando, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 163212 March 13, 2007
CANDANO SHIPPING LINES, INC., Petitioner,
vs.
FLORENTINA J. SUGATA-ON, Respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under
Rule 45 of the Revised Rules of Court, seeking to
reverse and set aside the Court of Appeals
Decision1 dated 23 May 2003 and its Resolution
dated 1 April 2004, affirming with modification the
Decision of the Regional Trial Court (RTC) of
Manila, Branch 20, finding Candano Shipping
Lines, Inc. (Candano Shipping) liable for the death
of Melquiades Sugata-on. The dispositive portion
of the assailed decision of the appellate court
reads:
IN VIEW OF ALL THE FOREGOING, the
appealed decision is AFFIRMED, with
the MODIFICATION that: (1) the awarded
compensation for the death of Melquiades Sugata-
on is reduced to ₱608,400.00; and, (2) the award
of moral and exemplary damages as well as
attorney’s fees is deleted. No pronouncement as
to costs.2
The factual and procedural antecedents of this
instant petition are as follows:
Candano Shipping is a domestic corporation
engaged in the business of coastwise trading
within the Philippines.3On 7 March 1994,
Melquiades Sugata-on was employed by Candano
Shipping as Third Marine Engineer on board its
cargo vessel, M/V David, Jr., with the monthly
salary of ₱7,800.00.4
On 25 March 1996, M/V David, Jr. left the port of
Davao City with its cargo and 20 crew members.
The voyage was initially uneventful until around
seven o’clock in the evening of 27 March 1996
when the vessel encountered rough seas and
strong winds while traversing the waters of Lianga
Bay, Surigao del Sur, causing her to tilt at three
degrees on its starboard side. Due to the violent
waves which continuously hammered the tilting
vessel, the seawaters slowly swallowed up the
main deck causing the tilting to worsen up to 30
degrees. In an effort to salvage the vessel, the ship
captain changed its course from the north to the
south but the tilting continued to grow to a
dangerously high level, rendering the vessel
beyond control. It was at this point when the ship
captain ordered the crew members to abandon the
vessel. Despite the efforts exerted by the crew
members to save the vessel, M/V David, Jr. sank
together with her cargo at around eleven o’clock in
the evening at Bakulin Point, Lianga Bay, Surigao
del Sur. Among the 20 crew members, twelve
survived, one died and seven were missing. One
of those who were missing was Melquiades
Sugata-on (Melquiades), the husband of herein
respondent, Florentina Sugata-on, (Florentina) as
shown in the List of Surviving Crew of the Ill-Fated
David, Jr., prepared by Candano Shipping.5
Upon learning of Melquiades’ fate, Florentina
immediately went to the office of Candano
Shipping in Manila to claim the death benefits of
her husband but it refused to pay.6
Such refusal prompted Florentina to institute on 31
January 1997, an action seeking indemnity for the
death of her husband against Candano Shipping
before the RTC of Manila, Branch 20. She
grounded her case on the provision of Article
17117 of the New Civil Code, which imposes upon
the employer liability for the death of his employee
in the course of employment, even if the death is
caused by a fortuitous event. Accordingly,
Florentina prayed that actual, moral and
exemplary damages including attorney’s fees, be
awarded in her favor.8
In its Answer,9 Candano Shipping countered that
Florentina had no cause of action against it
because the death of Melquiades was not yet an
146
established fact since he was merely reported
missing upon the sinking of M/V David, Jr. The
filing of the case before the RTC therefore was
premature for she should have waited until the
body of Melquiades could be recovered or until the
lapse of time which would render the provision of
Article 391 of the New Civil Code10 on presumptive
death operative.
The RTC resolved the controversy in favor of
Florentina and ratiocinated that the provision of
Article 391 of the New Civil Code on presumptive
death had become operative since the period of
four years had already elapsed since Melquiades
was reported missing upon the sinking incident
which occurred on 27 March 1996. In a
Decision11promulgated on 15 February 2001, the
RTC ordered Candano Shipping to indemnify
Florentina for the death of her husband, in the
following amounts:
WHEREFORE, premises considered, judgment is
hereby rendered ordering defendant Candano
Shipping Lines, Inc. to indemnify plaintiff Forentina
J. Sugata-on the amount of ₱988,400.00 as actual
damages, ₱100,000.00 as moral damages
₱50,000.00 as exemplary damages and 10% of
the amount due as and for attorney’s fees plus the
cost of suit.
The award for actual damages amounting to
₱988,400.00 was computed by the lower court by
adopting the formula in the computation of loss of
earning capacity enunciated in the case of Villa
Rey Transit, Inc. v. Court of Appeals,12wherein the
annual expenses of the deceased are deducted
from his gross annual income and multiplied by life
expectancy (gross annual income – annual
expense x life expectancy).13
The Motion for Reconsideration interposed by
Candano Shipping was denied by the RTC for lack
of cogent reason to disturb or reconsider its
decision.14
Aggrieved, Candano Shipping elevated the
adverse RTC decision to the Court of Appeals,
which in turn, affirmed with modification the
judgment of the lower court. The award for actual
damages was reduced from ₱998,400.00 to
₱608,400.00, while the awards for moral and
exemplary damages including attorney’s fees
were deleted for lack of sufficient basis for their
allowance.15
In arriving at the sum of ₱608,400.00, the
appellate court applied the standard prescribed by
Article 194 of the Labor Code of the Philippines, as
amended, to wit:
ART. 194. DEATH. – (a) Under such regulations
as the Commission may approve, the System shall
pay to the primary beneficiaries upon the death of
the covered employee under this Title an amount
equivalent to his monthly income benefit, plus ten
percent thereof for each dependent child, but not
exceeding five, beginning with the youngest and
without substitution, except as provided for in
paragraph (j) of Article 167 hereof; Provided,
however, That the monthly income benefit shall be
guaranteed for five years: Provided, further, That if
he has no primary beneficiary, the System shall
pay to his secondary beneficiaries the monthly
income benefit not to exceed sixty months;
Provided, finally, That the minimum monthly death
benefit shall not be less that fifteen thousand
pesos.
In a Resolution16 issued on 1 April 2004, the Court
of Appeals denied the Motion for Reconsideration
filed by Candano Shipping for failure to offer any
justifiable ground to modify, reverse or reconsider
the questioned decision.
Hence, this instant Petition for Review on
Certiorari filed by Candano Shipping raising the
following issues:
WHETHER OR NOT THE FORMULA
FOR FIXING THE AMOUNT OF DEATH
COMPENSATION IN ARTICLE 194 OF
THE LABOR CODE APPLIES IN
DETERMINING THE COMPENSATION
CLAIMED BY THE HEIR OF THE
DECEASED EMPLOYEE AGAINST THE
EMPLOYER UNDER ARTICLE 1711?
WHETHER OR NOT IT IS PERMITTED
FOR THE COURT OF APPEALS, ON
ORDINARY APPEAL, TO APPLY ART.
194 OF THE LABOR CODE ON A CLAIM
FOR DEATH COMPENSATION OF AN
EMPLOYEE AGAINST THE EMPLOYER
FILED AND TRIED BEFORE THE
REGULAR COURTS ON THE BASIS OF
ARTICLE 1711 OF THE CIVIL CODE AND
THE DOCTRINE ENUNCIATED IN THE
VILLA REY TRANSIT CASE?
WHETHER OR NOT APPLICATION OF
ARTICLE 194 OF THE LABOR CODE ON
THE CLAIM FOR DEATH
COMPENSATION OF RESPONDENT
OUSTS THE REGULAR COURTS,
147
 INCLUDING THE COURT OF APPEALS
OF JURISDICTION OVER THE CASE?
IN THE EVENT THAT THE SUPREME
COURT RULES THAT THE COURT OF
APPEALS APPLICATION OF ARTICLE
194 OF THE LABOR CODE IN THIS
CASE SHOULD BE SET ASIDE, IS
RESPONDENT ENTITLED TO
RECOVER DEATH COMPENSATION
FROM PETITIONER IN ACCORDANCE
WITH HER THEORY OF THE CASE AS
ALLEGED, ARGUED AND TRIED
BEFORE THE TRIAL COURT.17
Since the factual findings of the RTC and the Court
of Appeals that the non-recovery of Melquiades’
body for the period of four (4) years from 27 March
1996 creates a presumption that he is already
dead and that his death was caused by a fortuitous
event, were already settled, and considering that
these findings were not controverted by the parties
in this instant petition, we find no compelling
reason to disturb the same. Henceforth, we will
limit our discussion to the computation of the
amount of indemnification.
In its Petition, Candano Shipping argues that the
application of the measure stipulated under Article
194 of the Labor Code is erroneous since it applies
only to death compensation to be paid by the
Social Security System to the beneficiaries of a
deceased member, to which proposition Florentina
concedes. We agree. The remedy availed by
Sugata-on in filing the claim under the New Civil
Code has been validly recognized by the
prevailing jurisprudence on the matter.
In the case of Floresca v. Philex Mining
Company,18 we declared that the employees may
invoke either the Workmen’s Compensation Act or
the provisions of the Civil Code, subject to the
consequence that the choice of one remedy will
exclude the other and that the acceptance of the
compensation under the remedy chosen will
exclude the other remedy. The exception is where
the claimant who had already been paid under the
Workmen’s Compensation Act may still sue for
damages under the Civil Code on the basis of
supervening facts or developments occurring after
he opted for the first remedy.19
Stated differently, save for the recognized
exception, an employee cannot pursue both
remedies simultaneously but has the option to
proceed by interposing one remedy and waiving
his right over the other. As we have explained
in Floresca, this doctrinal rule is rooted on the
theory that the basis of the compensation under
the Workmen’s Compensation Act is separate and
distinct from the award of damages under the Civil
Code, thus:
The rationale in awarding compensation under the
Workmen’s Compensation Act differs from that in
giving damages under the Civil Code. The
compensation acts are based on a theory of
compensation distinct from the existing theories of
damages, payments under the acts being made as
compensation and not as damages (99 C.J.S. 53).
Compensation is given to mitigate harshness and
insecurity of industrial life for the workman and his
family. Hence, an employer is liable whether
negligence exists or not since liability is created by
law. Recovery under the Act is not based on any
theory of actionable wrong on the part of the
employer (99 D.J.S. 36).
In other words, under compensation acts, the
employer is liable to pay compensation benefits for
loss of income, as long as the death, sickness or
injury is work-connected or work-aggravated, even
if the death or injury is not due to the fault of the
employer (Murillo v. Mendoza, 66 Phil. 689). On
the other hand, damages are awarded to one as a
vindication of the wrongful invasion of his rights. It
is the indemnity recoverable by a person who has
sustained injury either in his person, property or
relative rights, through the act or default of another
(25 C.J.S. 452).
The principle underscored in the case
of Floresca was further affirmed in the later case
of Ysmael Maritime Corporation v.
Avelino,20 wherein we emphasized that once the
claimant had already exercised his choice to
pursue his right under one remedy, he is barred
from proceeding with an alternative remedy. As
eloquently laid down by Chief Justice Marcelo
Fernan:
It is therefore clear that respondents had not only
opted to recover under the Act but they had also
been duly paid. At the very least, a sense of fair
play would demand that if a person entitled to a
choice of remedies made a first election and
accepted the benefits thereof, he should no longer
be allowed to exercise the second option. "Having
staked his fortunes on a particular remedy,
(he) is precluded from pursuing the alternate
course, at least until the prior claim is rejected
by the Compensation Commission."
In the case at bar, Florentina was forced to institute
a civil suit for indemnity under the New Civil Code,
148
after Candano Shipping refused to compensate
her husband’s death.
The pertinent provision of the New Civil Code
reads:
Article 1711. Owners of enterprises and other
employers are obliged to pay compensation for the
death of or injuries to their laborers, workmen,
mechanics or other employees, even though the
event may have been purely accidental or entirely
due to a fortuitous cause, if the death or personal
injury arose out of and in the course of
employment. The employer is also liable for
compensation if the employee contracts any
illness or diseases caused by such employment or
as the result of the nature of employment. If the
mishap was due to the employee’s own notorious
negligence, or voluntary act, or drunkenness, the
employer shall not be liable for compensation.
When the employee’s lack of due care contributed
to his death or injury, the compensation shall be
equitably reduced.
In the case of Philippine Air Lines, Inc. v. Court of
Appeals,21 this Court validated the strength of the
aforementioned provision and made the employer
liable for the injury suffered by its employee in the
course of employment. We thus ruled:
Having affirmed the gross negligence of PAL in
allowing Capt. Delfin Bustamante to fly the plane
to Daet on January 8, 1951 whose slow reaction
and poor judgment was the cause of the crash-
landing of the plane which resulted in private
respondent Samson hitting his head against the
windshield and causing him injuries for which
reason PAL terminated his services and
employment as pilot after refusing to provide him
with the necessary medical treatment of
respondent’s periodic spells, headache and
general debility produced from said injuries, We
must necessarily affirm likewise the award of
damages or compensation under the
provisions of Art. 1711 and Art. 1712 of the New
Civil Code. x x x.
As early as the case of Valencia v. Manila Yacht
Club, Inc.,22 this Court, speaking through the
renowned civilist, Mr. Justice J.B.L. Reyes,
made a pronouncement that Article 1711 of the
Civil Code imposes upon the employer the
obligation to compensate the employee for
injury or sickness occasioned by his
employment, and thus articulated:
>Appellant’s demand for compensation is
predicated on employer’s liability for the sickness
of, or injury to, his employee imposed by Article
1711 of the Civil Code, which reads:
Article 1711. Owners of enterprises and other
employers are obliged to pay compensation for the
death x x x.
We find the abovequoted provision to be
applicable and controlling in this case. The matter
of the amount of compensation and allowable
medical expenses should be properly determined
by the Municipal Court after the parties are heard
accordingly.
Given that the right of the claimant arose from the
contract of employment and the corresponding
obligation imposed by the New Civil Code upon the
employer to indemnify the former for death and
injury of the employee circumstanced by his
employment, necessarily, the provisions of the
same code on damages shall govern the extent of
the employer’s liability.
The pertinent provision on damages under the
New Civil Code provides:
Art. 2199. Except as provided by law or by
stipulation, one is entitled to an adequate
compensation only for such pecuniary loss
suffered by him as he has duly proved. Such
compensation is referred to as actual or
compensatory damages.
Article 2200. Indemnification for damages shall
comprehend not only the value of the loss
suffered, but also that of the profits which the
obligee failed to obtain.
In order to give breath to the aforestated provisions
on damages of the New Civil Code, they must be
transformed into a more tangible and practical
mathematical form, so that the purpose of the law
to indemnify the employee or his heirs for his death
or injury occasioned by his employment, as
envisioned by the Article 1711 of the same code
may be realized. We deem it best to adopt the
formula for loss of earning capacity enunciated in
the case of Villa Rey v. Court of Appeals,23 in
computing the amount of actual damages to be
awarded to the claimant under Article 1711 of the
New Civil Code.
In Villa Rey, the common carrier was made liable
for the death of its passenger on board a
passenger bus owned and operated by Villa Rey
Transit, Inc. going to Manila from Lingayen,
Pangasinan. While the bus was nearing Sadsaran
Bridge in Barrio Sto. Domingo, Minalin,
149
Pampanga, it frontally hit the rear side of bull cart
filled with hay and bamboo poles. The protruding
end of one bamboo pole, about eight feet long,
penetrated through the glass windshield of the bus
and hit the face of Policarpio Quintos, Jr., who was
then sitting at the front row, causing his death.24
The obligation of the common carrier to indemnify
its passenger or his heirs for injury or death arose
from the contract of carriage entered into by the
common carrier and the passenger.25 By the very
nature of the obligation which is imbued with public
interest,26 in contract of carriage the carrier
assumes the express obligation to transport its
passenger to his destination safely and to observe
extraordinary diligence with due regard to all the
circumstances, and any injury that might be
suffered by the passenger is right away
attributable to the fault or negligence of the carrier
and thus gives rise to the right of the passenger or
his heirs for indemnity.27
In the same breadth, the employer shall be liable
for the death or personal injury of its employees in
the course of employment as sanctioned by Article
1711 of the New Civil Code. The liability of the
employer for death or personal injury of his
employees arose from the contract of employment
entered into between the employer and his
employee which is likewise imbued with public
interest.28 Accordingly, when the employee died or
was injured in the occasion of employment, the
obligation of the employer for indemnity,
automatically attaches. The indemnity may
partake of the form of actual, moral, nominal,
temperate, liquidated or exemplary damages, as
the case may be depending on the factual milieu
of the case and considering the criterion for the
award of these damages as outlined by our
jurisprudence.29 In the case at bar, only the award
of actual damages, specifically the award for
unearned income is warranted by the
circumstances since it has been duly proven that
the cause of death of Melquiades is a fortuitous
event for which Candano Shipping cannot be
faulted.
The formula for the computation of unearned
income is:
Net Earning Capacity = life expectancy x (gross
annual income - reasonable and necessary living
expenses).
Life expectancy is determined in accordance with
the formula:
2 / 3 x [80 – age of deceased at the time of death]
Jurisprudence provides that the first factor, i.e., life
expectancy, shall be computed by applying the
formula (2/3 x [80 - age at death]) adopted in the
American Expectancy Table of Mortality or the
Actuarial of Combined Experience Table of
Mortality.30
In the computation of the second factor, it is
computed by multiplying the life expectancy by the
net earnings of the deceased, i.e., the total
earnings less expenses necessary in the creation
of such earnings or income and less living and
other incidental expenses.31 The loss is not
equivalent to the entire earnings of the deceased,
but only such portion that he would have used to
support his dependents or heirs. Hence, we
deduct from his gross earnings the necessary
expenses supposed to be used by the deceased
for his own needs.32 The Court explained in Villa
Rey: 1avvphi1
[(The award of damages for loss of earning
capacity is)] concerned with the determination of
losses or damages sustained by the private
respondents, as dependents and intestate heirs of
the deceased, and that said damages consist, not
of the full amount of his earnings, but of the
support they received or would have received from
him had he not died in consequence of negligence
of petitioner’s agent. In fixing the amount of that
support, we must reckon with the ‘necessary
expenses of his own living’, which should be
deducted from his earnings. Thus, it has been
consistently held that earning capacity, as an
element of damages to one’s estate for his death
by wrongful act is necessarily his net earning
capacity or his capacity to acquire money, ‘less
necessary expense for his own living.’ Stated
otherwise, the amount recoverable is not the loss
of entire earning, but rather the loss of that portion
of the earnings which the beneficiary would have
received. In other words, only net earnings, and
not gross earnings are to be considered that is, the
total of the earnings less expenses necessary in
the creation of such earnings or income and less
living and other incidental expenses.33
In computing the third factor, the necessary living
expense, a survey of more recent jurisprudence
shows that this Court consistently pegged the
amount at 50% of the gross annual income.34 We
held in Smith Bell Dodwell Shipping Agency Corp.
v. Borja,35 that when there is no showing that the
living expenses constituted the smaller percentage
of the gross income, we fix the living expenses at
half of the gross income.
150
Applying the aforestated jurisprudential guidelines Accordingly, Florentina is entitled to recover the
in the computation of the amount of award for amount of ₱748,800.00 as actual damages for the
damages set out in Villa Rey, we now proceed to death of her husband. The awards of moral and
determining Melquiades’ life expectancy, thus: exemplary damages are deleted. However, the
award of costs of litigation and attorney’s fees are
Life expectancy = 2 / 3 x [80 – age of deceased at proper.40
the time of death]
WHEREFORE, in view of the foregoing, the instant
2 /3 x [80 – 56] petition is DENIED and the Decision dated 23 May
2003 as well as the Resolution dated 1 April 2004,
2 / 3 x [24] rendered by the Court of Appeals in CA-G.R. CV
No. 70410, are hereby PARTIALLY AFFIRMED in
so far as it finds petitioner liable to respondent for
Life expectancy = 16
damages.
With 16 more years of life expectancy and a
Pursuant to the appropriate provisions of the New
monthly income of ₱7,800.00, as evidenced by the
Civil Code and the prevailing jurisprudence on the
pay slips duly presented before the RTC,
matter, petitioner Candano Shipping Lines, Inc., is
Melquiades’ earning capacity is computed as
ORDERED to pay the amount of ₱748,800.00, as
follows:
actual damages, plus 10% of the amount awarded
as attorney’s fee plus cost of the suit.
Net Earning Capacity = life expectancy x (gross
annual income - reasonable and necessary living
SO ORDERED.
expenses).
MINITA V. CHICO-NAZARIO
= 16 x ( ₱93,600.00 – ₱ 46,800.00)
Associate Justice
= 16 x ( ₱ 46,800.00 )
WE CONCUR:
Net Earning Capacity = ₱ 748,800.00
CONSUELO YNARES-SANTIAGO
Associate Justice
The argument raised by Candano Shipping that Chairperson
the formula for determining the life expectancy
under Villa Reycannot be automatically applied
without proof of the basis for the expected length MA. ALICIA No part; on leave
of life of a Filipino does not merit our consideration. AUSTRIA- ROMEO J.
The formula for life expectancy has been MARTINEZ CALLEJO, SR.*
repeatedly adopted in our jurisprudence in fixing Associate Justice Associate Justice
the amount of indemnity for the death of a party.
This was adopted from the American Expectancy
Table of Mortality or the Actuarial of Combined ANTONIO EDUARDO B. NACHURA
Experience Table of Mortality which was used by Associate Justice
insurers in determining the capital sum to be
charged for annuity.36 ATTESTATION

Admittedly, in several cases, this Court reduced
the life expectancy multiplier considering the
medical history such as when the deceased
previously underwent a major surgery37 or when it
was shown that he was treated for chest pains,
backache or occasional feeling of tiredness38 and
the fact that the deceased has been consistently
engaged in a dangerous and risky activity tending
to shorten his life.39 Failing to prove, however, that
any of these circumstances is attendant in the
case at bar, Candano Shipping cannot validly
assert that the standard life expectancy factor laid
down in Villa Rey cannot be applied in this case.
I attest that the conclusions in the above Decision
were reached in consultation before the case was
assigned to the writer of the opinion of the Court’s
Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution, and the Division Chairperson’s

151
Attestation, it is hereby certified that the former position, considering the strained
conclusions in the above Decision were reached in relationship between the parties, and his apparent
consultation before the case was assigned to the reluctance to be reinstated, computed only up to
writer of the opinion of the Court’s Division. promulgation of this decision as follows:

REYNATO S. PUNO
SEPARATION PAY
Chief Justice

Date Hired = August 1990

Republic of the Philippines
SUPREME COURT
Manila Rate = ₱198/day

EN BANC Date of Decision = Aug. 18, 1998

G.R. No. 189871 August 13, 2013

Length of Service = 8 yrs. & 1 month
DARIO NACAR, PETITIONER,
vs. ₱198.00 x 26 days x 8 months = ₱41,184.00
GALLERY FRAMES AND/OR FELIPE
BORDEY, JR., RESPONDENTS.
BACKWAGES
DECISION
Date Dismissed = January 24,
PERALTA, J.: 1997

This is a petition for review on certiorari assailing Rate per day = ₱196.00
the Decision1 dated September 23, 2008 of the
Court of Appeals (CA) in CA-G.R. SP No. 98591,
and the Resolution2 dated October 9, 2009 Date of Decisions = Aug. 18, 1998
denying petitioner’s motion for reconsideration.
a) 1/24/97 to 2/5/98 = 12.36 mos.
The factual antecedents are undisputed.
₱196.00/day x 12.36 mos. = ₱62,986.56
Petitioner Dario Nacar filed a complaint for
constructive dismissal before the Arbitration
Branch of the National Labor Relations b) 2/6/98 to 8/18/98 = 6.4 months
Commission (NLRC) against respondents Gallery
Frames (GF) and/or Felipe Bordey, Jr., docketed Prevailing Rate per day = ₱62,986.00
as NLRC NCR Case No. 01-00519-97.

On October 15, 1998, the Labor Arbiter rendered ₱198.00 x 26 days x 6.4 = ₱32,947.20
a Decision3 in favor of petitioner and found that he mos.
was dismissed from employment without a valid or
just cause. Thus, petitioner was awarded TOTAL = ₱95.933.76
backwages and separation pay in lieu of
reinstatement in the amount of ₱158,919.92. The
dispositive portion of the decision, reads:
xxxx
With the foregoing, we find and so rule that
WHEREFORE, premises considered, judgment is
respondents failed to discharge the burden of
hereby rendered finding respondents guilty of
showing that complainant was dismissed from
constructive dismissal and are therefore, ordered:
employment for a just or valid cause. All the more,
it is clear from the records that complainant was
never afforded due process before he was To pay jointly and severally the complainant the
terminated. As such, we are perforce constrained amount of sixty-two thousand nine hundred eighty-
to grant complainant’s prayer for the payments of six pesos and 56/100 (₱62,986.56) Pesos
separation pay in lieu of reinstatement to his representing his separation pay;

152
To pay jointly and severally the complainant the
amount of nine (sic) five thousand nine hundred
thirty-three and 36/100 (₱95,933.36) representing
his backwages; and
All other claims are hereby dismissed for lack of
merit.
SO ORDERED.4
Respondents appealed to the NLRC, but it was
dismissed for lack of merit in the Resolution5 dated
February 29, 2000. Accordingly, the NLRC
sustained the decision of the Labor Arbiter.
Respondents filed a motion for reconsideration,
but it was denied.6
Dissatisfied, respondents filed a Petition for
Review on Certiorari before the CA. On August 24,
2000, the CA issued a Resolution dismissing the
petition. Respondents filed a Motion for
Reconsideration, but it was likewise denied in a
Resolution dated May 8, 2001.7
Respondents then sought relief before the
Supreme Court, docketed as G.R. No. 151332.
Finding no reversible error on the part of the CA,
this Court denied the petition in the Resolution
dated April 17, 2002.8
An Entry of Judgment was later issued certifying
that the resolution became final and executory on
May 27, 2002.9The case was, thereafter, referred
back to the Labor Arbiter. A pre-execution
conference was consequently scheduled, but
respondents failed to appear.10
On November 5, 2002, petitioner filed a Motion for
Correct Computation, praying that his backwages
be computed from the date of his dismissal on
January 24, 1997 up to the finality of the
Resolution of the Supreme Court on May 27,
2002.11 Upon recomputation, the Computation and
Examination Unit of the NLRC arrived at an
updated amount in the sum of ₱471,320.31.12
On December 2, 2002, a Writ of Execution13 was
issued by the Labor Arbiter ordering the Sheriff to
collect from respondents the total amount of
₱471,320.31. Respondents filed a Motion to
Quash Writ of Execution, arguing, among other
things, that since the Labor Arbiter awarded
separation pay of ₱62,986.56 and limited
backwages of ₱95,933.36, no more recomputation
is required to be made of the said awards. They
claimed that after the decision becomes final and
executory, the same cannot be altered or
amended anymore.14 On January 13, 2003, the
Labor Arbiter issued an Order15 denying the
motion. Thus, an Alias Writ of Execution16 was
issued on January 14, 2003.
Respondents again appealed before the NLRC,
which on June 30, 2003 issued a
Resolution granting the appeal in favor of the
17
respondents and ordered the recomputation of the
judgment award.
On August 20, 2003, an Entry of Judgment was
issued declaring the Resolution of the NLRC to be
final and executory. Consequently, another pre-
execution conference was held, but respondents
failed to appear on time. Meanwhile, petitioner
moved that an Alias Writ of Execution be issued to
enforce the earlier recomputed judgment award in
the sum of ₱471,320.31.18
The records of the case were again forwarded to
the Computation and Examination Unit for
recomputation, where the judgment award of
petitioner was reassessed to be in the total amount
of only ₱147,560.19.
Petitioner then moved that a writ of execution be
issued ordering respondents to pay him the
original amount as determined by the Labor Arbiter
in his Decision dated October 15, 1998, pending
the final computation of his backwages and
separation pay.
On January 14, 2003, the Labor Arbiter issued an
Alias Writ of Execution to satisfy the judgment
award that was due to petitioner in the amount of
₱147,560.19, which petitioner eventually received.
Petitioner then filed a Manifestation and Motion
praying for the re-computation of the monetary
award to include the appropriate interests.19
On May 10, 2005, the Labor Arbiter issued an
Order20 granting the motion, but only up to the
amount of ₱11,459.73. The Labor Arbiter
reasoned that it is the October 15, 1998 Decision
that should be enforced considering that it was the
one that became final and executory. However,
the Labor Arbiter reasoned that since the decision
states that the separation pay and backwages are
computed only up to the promulgation of the said
decision, it is the amount of ₱158,919.92 that
should be executed. Thus, since petitioner already
received ₱147,560.19, he is only entitled to the
balance of ₱11,459.73.
Petitioner then appealed before the NLRC,21 which
appeal was denied by the NLRC in its
Resolution22 dated September 27, 2006. Petitioner
153
filed a Motion for Reconsideration, but it was
likewise denied in the Resolution23dated January
31, 2007.
Aggrieved, petitioner then sought recourse before
the CA, docketed as CA-G.R. SP No. 98591.
On September 23, 2008, the CA rendered a
Decision24 denying the petition. The CA opined
that since petitioner no longer appealed the
October 15, 1998 Decision of the Labor Arbiter,
which already became final and executory, a
belated correction thereof is no longer allowed.
The CA stated that there is nothing left to be done
except to enforce the said judgment.
Consequently, it can no longer be modified in any
respect, except to correct clerical errors or
mistakes.
Petitioner filed a Motion for Reconsideration, but it
was denied in the Resolution25 dated October 9,
2009.
Hence, the petition assigning the lone error:
I
WITH DUE RESPECT, THE HONORABLE
COURT OF APPEALS SERIOUSLY ERRED,
COMMITTED GRAVE ABUSE OF DISCRETION
AND DECIDED CONTRARY TO LAW IN
UPHOLDING THE QUESTIONED
RESOLUTIONS OF THE NLRC WHICH, IN
TURN, SUSTAINED THE MAY 10, 2005 ORDER
OF LABOR ARBITER MAGAT MAKING THE
DISPOSITIVE PORTION OF THE OCTOBER 15,
1998 DECISION OF LABOR ARBITER LUSTRIA
SUBSERVIENT TO AN OPINION EXPRESSED
IN THE BODY OF THE SAME DECISION.26
Petitioner argues that notwithstanding the fact that
there was a computation of backwages in the
Labor Arbiter’s decision, the same is not final until
reinstatement is made or until finality of the
decision, in case of an award of separation pay.
Petitioner maintains that considering that the
October 15, 1998 decision of the Labor Arbiter did
not become final and executory until the April 17,
2002 Resolution of the Supreme Court in G.R. No.
151332 was entered in the Book of Entries on May
27, 2002, the reckoning point for the computation
of the backwages and separation pay should be on
May 27, 2002 and not when the decision of the
Labor Arbiter was rendered on October 15, 1998.
Further, petitioner posits that he is also entitled to
the payment of interest from the finality of the
decision until full payment by the respondents.
On their part, respondents assert that since only
separation pay and limited backwages were
awarded to petitioner by the October 15, 1998
decision of the Labor Arbiter, no more
recomputation is required to be made of said
awards. Respondents insist that since the decision
clearly stated that the separation pay and
backwages are "computed only up to [the]
promulgation of this decision," and considering
that petitioner no longer appealed the decision,
petitioner is only entitled to the award as computed
by the Labor Arbiter in the total amount of
₱158,919.92. Respondents added that it was only
during the execution proceedings that the
petitioner questioned the award, long after the
decision had become final and executory.
Respondents contend that to allow the further
recomputation of the backwages to be awarded to
petitioner at this point of the proceedings would
substantially vary the decision of the Labor Arbiter
as it violates the rule on immutability of judgments.
The petition is meritorious.
The instant case is similar to the case of Session
Delights Ice Cream and Fast Foods v. Court of
Appeals (Sixth Division),27 wherein the issue
submitted to the Court for resolution was the
propriety of the computation of the awards made,
and whether this violated the principle of
immutability of judgment. Like in the present case,
it was a distinct feature of the judgment of the
Labor Arbiter in the above-cited case that the
decision already provided for the computation of
the payable separation pay and backwages due
and did not further order the computation of the
monetary awards up to the time of the finality of
the judgment. Also in Session Delights, the
dismissed employee failed to appeal the decision
of the labor arbiter. The Court clarified, thus:
In concrete terms, the question is whether a re-
computation in the course of execution of the labor
arbiter's original computation of the awards made,
pegged as of the time the decision was rendered
and confirmed with modification by a final CA
decision, is legally proper. The question is posed,
given that the petitioner did not immediately pay
the awards stated in the original labor arbiter's
decision; it delayed payment because it continued
with the litigation until final judgment at the CA
level.
A source of misunderstanding in implementing the
final decision in this case proceeds from the way
the original labor arbiter framed his decision. The
decision consists essentially of two parts.
154
The first is that part of the decision that cannot now
be disputed because it has been confirmed with
finality. This is the finding of the illegality of the
dismissal and the awards of separation pay in lieu
of reinstatement, backwages, attorney's fees, and
legal interests.
The second part is the computation of the awards
made. On its face, the computation the labor
arbiter made shows that it was time-bound as can
be seen from the figures used in the computation.
This part, being merely a computation of what the
first part of the decision established and declared,
can, by its nature, be re-computed. This is the part,
too, that the petitioner now posits should no longer
be re-computed because the computation is
already in the labor arbiter's decision that the CA
had affirmed. The public and private respondents,
on the other hand, posit that a re-computation is
necessary because the relief in an illegal dismissal
decision goes all the way up to reinstatement if
reinstatement is to be made, or up to the finality of
the decision, if separation pay is to be given in lieu
reinstatement.
That the labor arbiter's decision, at the same time
that it found that an illegal dismissal had taken
place, also made a computation of the award, is
understandable in light of Section 3, Rule VIII of
the then NLRC Rules of Procedure which requires
that a computation be made. This Section in part
states:
[T]he Labor Arbiter of origin, in cases involving
monetary awards and at all events, as far as
practicable, shall embody in any such decision or
order the detailed and full amount awarded.
Clearly implied from this original computation is its
currency up to the finality of the labor arbiter's
decision. As we noted above, this implication is
apparent from the terms of the computation itself,
and no question would have arisen had the parties
terminated the case and implemented the decision
at that point.
However, the petitioner disagreed with the labor
arbiter's findings on all counts - i.e., on the finding
of illegality as well as on all the consequent awards
made. Hence, the petitioner appealed the case to
the NLRC which, in turn, affirmed the labor
arbiter's decision. By law, the NLRC decision is
final, reviewable only by the CA on jurisdictional
grounds.
The petitioner appropriately sought to nullify the
NLRC decision on jurisdictional grounds through a
timely filed Rule 65 petition for certiorari. The CA
decision, finding that NLRC exceeded its authority
in affirming the payment of 13th month pay and
indemnity, lapsed to finality and was subsequently
returned to the labor arbiter of origin for execution.
It was at this point that the present case arose.
Focusing on the core illegal dismissal portion of
the original labor arbiter's decision, the
implementing labor arbiter ordered the award re-
computed; he apparently read the figures originally
ordered to be paid to be the computation due had
the case been terminated and implemented at the
labor arbiter's level. Thus, the labor arbiter re-
computed the award to include the separation pay
and the backwages due up to the finality of the CA
decision that fully terminated the case on the
merits. Unfortunately, the labor arbiter's approved
computation went beyond the finality of the CA
decision (July 29, 2003) and included as well the
payment for awards the final CA decision had
deleted - specifically, the proportionate 13th month
pay and the indemnity awards. Hence, the CA
issued the decision now questioned in the present
petition.
We see no error in the CA decision confirming that
a re-computation is necessary as it essentially
considered the labor arbiter's original decision in
accordance with its basic component parts as we
discussed above. To reiterate, the first part
contains the finding of illegality and its monetary
consequences; the second part is the computation
of the awards or monetary consequences of the
illegal dismissal, computed as of the time of the
labor arbiter's original decision.28
Consequently, from the above disquisitions, under
the terms of the decision which is sought to be
executed by the petitioner, no essential change is
made by a recomputation as this step is a
necessary consequence that flows from the nature
of the illegality of dismissal declared by the Labor
Arbiter in that decision.29 A recomputation (or an
original computation, if no previous computation
has been made) is a part of the law – specifically,
Article 279 of the Labor Code and the established
jurisprudence on this provision – that is read into
the decision. By the nature of an illegal dismissal
case, the reliefs continue to add up until full
satisfaction, as expressed under Article 279 of the
Labor Code. The recomputation of the
consequences of illegal dismissal upon execution
of the decision does not constitute an alteration or
amendment of the final decision being
implemented. The illegal dismissal ruling stands;
only the computation of monetary consequences
of this dismissal is affected, and this is not a
violation of the principle of immutability of final
judgments.30
155
That the amount respondents shall now pay has
greatly increased is a consequence that it cannot
avoid as it is the risk that it ran when it continued
to seek recourses against the Labor Arbiter's
decision. Article 279 provides for the
consequences of illegal dismissal in no uncertain
terms, qualified only by jurisprudence in its
interpretation of when separation pay in lieu of
reinstatement is allowed. When that happens, the
finality of the illegal dismissal decision becomes
the reckoning point instead of the reinstatement
that the law decrees. In allowing separation pay,
the final decision effectively declares that the
employment relationship ended so that separation
pay and backwages are to be computed up to that
point.31
Finally, anent the payment of legal interest. In the
landmark case of Eastern Shipping Lines, Inc. v.
Court of Appeals,32 the Court laid down the
guidelines regarding the manner of computing
legal interest, to wit:
II. With regard particularly to an award of interest
in the concept of actual and compensatory
damages, the rate of interest, as well as the
accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it
consists in the payment of a sum of
money, i.e., a loan or forbearance of
money, the interest due should be that
which may have been stipulated in writing.
Furthermore, the interest due shall itself
earn legal interest from the time it is
judicially demanded. In the absence of
stipulation, the rate of interest shall be 12%
per annum to be computed from default,
i.e., from judicial or extrajudicial demand
under and subject to the provisions of
Article 1169 of the Civil Code.
2. When an obligation, not constituting a
loan or forbearance of money, is
breached, an interest on the amount of
damages awarded may be imposed at the
discretion of the court at the rate of 6% per
annum. No interest, however, shall be
adjudged on unliquidated claims or
damages except when or until the demand
can be established with reasonable
certainty. Accordingly, where the demand
is established with reasonable certainty,
the interest shall begin to run from the time
the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but
when such certainty cannot be so
reasonably established at the time the
demand is made, the interest shall begin
to run only from the date the judgment of
the court is made (at which time the
quantification of damages may be deemed
to have been reasonably ascertained).
The actual base for the computation of
legal interest shall, in any case, be on the
amount finally adjudged.
3. When the judgment of the court
awarding a sum of money becomes final
and executory, the rate of legal interest,
whether the case falls under paragraph 1
or paragraph 2, above, shall be 12% per
annum from such finality until its
satisfaction, this interim period being
deemed to be by then an equivalent to a
forbearance of credit.33
Recently, however, the Bangko Sentral ng
Pilipinas Monetary Board (BSP-MB), in its
Resolution No. 796 dated May 16, 2013, approved
the amendment of Section 234 of Circular No. 905,
Series of 1982 and, accordingly, issued Circular
No. 799,35 Series of 2013, effective July 1, 2013,
the pertinent portion of which reads:
The Monetary Board, in its Resolution No. 796
dated 16 May 2013, approved the following
revisions governing the rate of interest in the
absence of stipulation in loan contracts, thereby
amending Section 2 of Circular No. 905, Series of
1982:
Section 1. The rate of interest for the loan or
forbearance of any money, goods or credits and
the rate allowed in judgments, in the absence of an
express contract as to such rate of interest, shall
be six percent (6%) per annum.
Section 2. In view of the above, Subsection
X305.136 of the Manual of Regulations for Banks
and Sections 4305Q.1,37 4305S.338 and
4303P.1 of the Manual of Regulations for Non-
39
Bank Financial Institutions are hereby amended
accordingly.
This Circular shall take effect on 1 July 2013.
Thus, from the foregoing, in the absence of an
express stipulation as to the rate of interest that
would govern the parties, the rate of legal interest
for loans or forbearance of any money, goods or
credits and the rate allowed in judgments shall no
longer be twelve percent (12%) per annum - as
reflected in the case of Eastern Shipping
Lines40and Subsection X305.1 of the Manual of
Regulations for Banks and Sections 4305Q.1,
156
4305S.3 and 4303P.1 of the Manual of
Regulations for Non-Bank Financial Institutions,
before its amendment by BSP-MB Circular No.
799 - but will now be six percent (6%) per annum
effective July 1, 2013. It should be noted,
nonetheless, that the new rate could only be
applied prospectively and not retroactively.
Consequently, the twelve percent (12%) per
annum legal interest shall apply only until June 30,
2013. Come July 1, 2013 the new rate of six
percent (6%) per annum shall be the prevailing
rate of interest when applicable.
Corollarily, in the recent case of Advocates for
Truth in Lending, Inc. and Eduardo B. Olaguer v.
Bangko Sentral Monetary Board,41 this Court
affirmed the authority of the BSP-MB to set interest
rates and to issue and enforce Circulars when it
ruled that "the BSP-MB may prescribe the
maximum rate or rates of interest for all loans or
renewals thereof or the forbearance of any money,
goods or credits, including those for loans of low
priority such as consumer loans, as well as such
loans made by pawnshops, finance companies
and similar credit institutions. It even authorizes
the BSP-MB to prescribe different maximum rate
or rates for different types of borrowings, including
deposits and deposit substitutes, or loans of
financial intermediaries."
Nonetheless, with regard to those judgments that
have become final and executory prior to July 1,
2013, said judgments shall not be disturbed and
shall continue to be implemented applying the rate
of interest fixed therein.
1aw p++i1
To recapitulate and for future guidance, the
guidelines laid down in the case of Eastern
Shipping Lines42 are accordingly modified to
embody BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its
source, i.e., law, contracts, quasi-
contracts, delicts or quasi-delicts is
breached, the contravenor can be held
liable for damages. The provisions under
Title XVIII on "Damages" of the Civil Code
govern in determining the measure of
recoverable damages. 1âwphi 1
II. With regard particularly to an award of
interest in the concept of actual and
compensatory damages, the rate of
interest, as well as the accrual thereof, is
imposed, as follows:
When the obligation is breached, and it consists in
the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be
that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall
be 6% per annum to be computed from default,
i.e., from judicial or extrajudicial demand under
and subject to the provisions of Article 1169 of the
Civil Code.
When an obligation, not constituting a loan or
forbearance of money, is breached, an interest on
the amount of damages awarded may be imposed
at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged
on unliquidated claims or damages, except when
or until the demand can be established with
reasonable certainty. Accordingly, where the
demand is established with reasonable certainty,
the interest shall begin to run from the time the
claim is made judicially or extrajudicially (Art.
1169, Civil Code), but when such certainty cannot
be so reasonably established at the time the
demand is made, the interest shall begin to run
only from the date the judgment of the court is
made (at which time the quantification of damages
may be deemed to have been reasonably
ascertained). The actual base for the computation
of legal interest shall, in any case, be on the
amount finally adjudged.
When the judgment of the court awarding a sum of
money becomes final and executory, the rate of
legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 6%
per annum from such finality until its satisfaction,
this interim period being deemed to be by then an
equivalent to a forbearance of credit.
And, in addition to the above, judgments that have
become final and executory prior to July 1, 2013,
shall not be disturbed and shall continue to be
implemented applying the rate of interest fixed
therein.
WHEREFORE, premises considered, the Decision
dated September 23, 2008 of the Court of Appeals
in CA-G.R. SP No. 98591, and the Resolution
dated October 9, 2009 are REVERSED and SET
ASIDE. Respondents are Ordered to Pay
petitioner:
(1) backwages computed from the time
petitioner was illegally dismissed on
January 24, 1997 up to May 27, 2002,
when the Resolution of this Court in G.R.
No. 151332 became final and executory;
157
 (2) separation pay computed from August
1990 up to May 27, 2002 at the rate of one ESTELA M.
BIENVENIDO L.
month pay per year of service; and PERLAS-
REYES
BERNABE
Associate Justice
(3) interest of twelve percent (12%) per Associate Justice
annum of the total monetary awards,
computed from May 27, 2002 to June 30,
2013 and six percent (6%) per annum from MARVIC MARIO VICTOR F. LEONEN
July 1, 2013 until their full satisfaction. Associate Justice

The Labor Arbiter is hereby ORDERED to make CERTIFICATION

another recomputation of the total monetary
benefits awarded and due to petitioner in
accordance with this Decision. Pursuant to Section 13, Article VIII of the
Constitution, it is hereby certified that the
conclusions in the above Decision had been
SO ORDERED. reached in consultation before the case was
assigned to the writer of the opinion of the Court.
DIOSDADO M. PERALTA
Associate Justice MARIA LOURDES P. A. SERENO
Chief Justice
WE CONCUR:
Republic of the Philippines
MARIA LOURDES P. A. SERENO
SUPREME COURT
Chief Justice
Manila

ANTONIO T. PRESBITERO J. EN BANC

CARPIO VELASCO, JR.
Associate Justice Associate Justice G.R. No. L-22415 March 30, 1966

FERNANDO LOPEZ, ET AL., plaintiffs-

TERESITA J. appellants,
ARTURO D. vs.
LEONARDO-DE
BRION PAN AMERICAN WORLD
CASTRO
Associate Justice AIRWAYS, defendant-appellant.
Associate Justice
Ross, Selph and Carrascoso for the defendant-
LUCAS P. MARIANO C. appellant.
Vicente J. Francisco for the plaintiffs-appellants.
BERSAMIN DEL CASTILLO
Associate Justice Associate Justice
BENGZON, J.P., J.:

ROBERTO A. MARTIN S Plaintiffs and defendant appeal from a decision of

the Court of First Instance of Rizal. Since the value
ABAD VILLARAMA, JR.
in controversy exceeds P200,000 the appeals
Associate Justice Associate Justice
were taken directly to this Court upon all questions
involved (Sec. 17, par. 3[5], Judiciary Act).
JOSE
JOSE CATRAL Stated briefly the facts not in dispute are as
PORTUGAL follows: Reservations for first class
MENDOZA
PEREZ accommodations in Flight No. 2 of Pan American
Associate Justice
Associate Justice World Airways — hereinafter otherwise called
PAN-AM — from Tokyo to San Francisco on May
24, 1960 were made with
PAN-AM on March 29, 1960, by "Your Travel
Guide" agency, specifically, by Delfin Faustino, for
then Senator Fernando Lopez, his wife Maria J.
Lopez, his son-in-law Alfredo Montelibano, Jr., and

158
his daughter, Mrs. Alfredo Montelibano, Jr.,
(Milagros Lopez Montelibano). PAN-AM's San
Francisco head office confirmed the reservations
on March 31, 1960.
First class tickets for the abovementioned flight
were subsequently issued by
PAN-AM on May 21 and 23, 1960, in favor of
Senator Lopez and his party. The total fare of
P9,444 for all of them was fully paid before the
tickets were issued.
As scheduled Senator Lopez and party left Manila
by Northwest Airlines on May 24, 1960, arriving in
Tokyo at 5:30 P.M. of that day. As soon as they
arrived Senator Lopez requested Minister
Busuego of the Philippine Embassy to contact
PAN-AM's Tokyo office regarding their first class
accommodations for that evening's flight. For the
given reason that the first class seats therein were
all booked up, however, PAN-AM's Tokyo office
informed Minister Busuego that PAN-AM could not
accommodate Senator Lopez and party in that trip
as first class passengers. Senator Lopez
thereupon gave their first class tickets to Minister
Busuego for him to show the same to PAN-AM's
Tokyo office, but the latter firmly reiterated that
there was no accommodation for them in the first
class, stating that they could not go in that flight
unless they took the tourist class therein.
Due to pressing engagements awaiting Senator
Lopez and his wife, in the United States — he had
to attend a business conference in San Francisco
the next day and she had to undergo a medical
check-up in Mayo Clinic, Rochester, Minnesota,
on May 28, 1960 and needed three days rest
before that in San Francisco — Senator Lopez and
party were constrained to take PAN-AM's flight
from Tokyo to San Francisco as tourist
passengers. Senator Lopez however made it
clear, as indicated in his letter to PAN-AM's Tokyo
office on that date (Exh. A), that they did so "under
protest" and without prejudice to further action
against the airline.
1äwphï1.ñët
Suit for damages was thereafter filed by Senator
Lopez and party against PAN-AM on June 2, 1960
in the Court of First Instance of Rizal. Alleging
breach of contracts in bad faith by defendant,
plaintiffs asked for P500,000 actual and moral
damages, P100,000 exemplary damages,
P25,000 attorney's fees plus costs. PAN-AM filed
its answer on June 22, 1960, asserting that its
failure to provide first class accommodations to
plaintiffs was due to honest error of its employees.
It also interposed a counterclaim for attorney's
fees of P25,000.
Subsequently, further pleadings were filed, thus:
plaintiffs' answer to the counterclaim, on July 25,
1960; plaintiffs' reply attached to motion for its
admittance, on December 2, 1961; defendant's
supplemental answer, on March 8, 1962; plaintiffs'
reply to supplemental answer, on March 10, 1962;
and defendant's amended supplemental answer,
on July 10, 1962.
After trial — which took twenty-two (22) days
ranging from November 25, 1960 to January 5,
1963 — the Court of First Instance rendered its
decision on November 13, 1963, the dispositive
portion stating:
In view of the foregoing considerations,
judgment is hereby rendered in favor of the
plaintiffs and against the defendant, which
is accordingly ordered to pay the plaintiffs
the following: (a) P100,000.00 as moral
damages; (b) P20,000.00 as exemplary
damages; (c) P25,000.00 as attorney's
fees, and the costs of this action.
So ordered.
Plaintiffs, however, on November 21, 1963, moved
for reconsideration of said judgment, asking that
moral damages be increased to P400,000 and that
six per cent (6%) interest per annum on the
amount of the award be granted. And defendant
opposed the same. Acting thereon the trial court
issued an order on December 14, 1963,
reconsidering the dispositive part of its decision to
read as follows:
In view of the foregoing considerations,
judgment is hereby rendered in favor of the
plaintiffs and against the defendant, which
is accordingly ordered to pay the plaintiffs
the following: (a) P150,000.00 as moral
damages; (b) P25,000.00 as exemplary
damages; with legal interest on both from
the date of the filing of the complaint until
paid; and (c) P25,000.00 as attorney's
fees; and the costs of this action.
So ordered.
It is from said judgment, as thus reconsidered, that
both parties have appealed.
Defendant, as stated, has from the start admitted
that it breached its contracts with plaintiffs to
provide them with first class accommodations in its
Tokyo-San Francisco flight of May 24, 1960. In its
appeal, however, it takes issue with the finding of
the court a quo that it acted in bad faith in the
159
branch of said contracts. Plaintiffs, on the other
hand, raise questions on the amount of damages
awarded in their favor, seeking that the same be
increased to a total of P650,000.
Anent the issue of bad faith the records show the
respective contentions of the parties as follows.
According to plaintiffs, defendant acted in bad faith
because it deliberately refused to comply with its
contract to provide first class accommodations to
plaintiffs, out of racial prejudice against Orientals.
And in support of its contention that what was done
to plaintiffs is an oftrepeated practice of defendant,
evidence was adduced relating to two previous
instances of alleged racial discrimination by
defendant against Filipinos in favor of "white"
passengers. Said previous occasions are what
allegedly happened to (1) Benito Jalbuena and (2)
Cenon S. Cervantes and his wife.
And from plaintiffs' evidence this is what allegedly
happened; Jalbuena bought a first class ticket
from PAN-AM on April 13, 1960; he confirmed it on
April 15, 1960 as to the Tokyo-Hongkong flight of
April 20, 1960; PAN-AM similarly confirmed it on
April 20, 1960. At the airport he and another
Oriental — Mr. Tung — were asked to step aside
while other passengers - including "white"
passengers — boarded PAN-AM's plane. Then
PAN-AM officials told them that one of them had to
stay behind. Since Mr. Tung was going all the way
to London, Jalbuena was chosen to be left behind.
PAN-AM's officials could only explain by saying
there was "some mistake". Jalbuena thereafter
wrote PAN-AM to protest the incident (Exh. B).
As to Cenon S. Cervantes it would appear that in
Flight No. 6 of PAN-AM on September 29, 1958
from Bangkok to Hongkong, he and his wife had to
take tourist class, although they had first class
tickets, which they had previously confirmed,
because their seats in first class were given to
"passengers from London."
Against the foregoing, however, defendant's
evidence would seek to establish its theory of
honest mistake, thus:
The first class reservations of Senator Lopez and
party were made on March 29, 1960 together with
those of four members of the Rufino family, for a
total of eight (8) seats, as shown in their joint
reservation card (Exh. 1). Subsequently on March
30, 1960, two other Rufinos secured reservations
and were given a separate reservation card (Exh.
2). A new reservation card consisting of two pages
(Exhs. 3 and 4) was then made for the original of
eight passengers, namely, Senator Lopez and
party and four members of the Rufino family, the
first page (Exh. 3) referring to 2 Lopezes, 2
Montelibanos and 1 Rufino and the second page
(Exh. 4) referring to 3 Rufinos. On April 18, 1960
"Your Travel Guide" agency cancelled the
reservations of the Rufinos. A telex message was
thereupon sent on that date to PAN-AM's head
office at San Francisco by Mariano Herranz, PAN-
AM's reservations employee at its office in Escolta,
Manila. (Annex A-Acker's to Exh. 6.) In said
message, however, Herranz mistakenly cancelled
all the seats that had been reserved, that is,
including those of Senator Lopez and party.
The next day — April 1960 — Herranz discovered
his mistake, upon seeing the reservation card
newly prepared by his co-employee Pedro Asensi
for Sen. Lopez and party to the exclusion of the
Rufinos (Exh. 5). It was then that Herranz sent
another telex wire to the San Francisco head
office, stating his error and asking for the
reinstatement of the four (4) first class seats
reserved for Senator Lopez and party (Annex A-
Velasco's to Exh. 6). San Francisco head office
replied on April 22, 1960 that Senator Lopez and
party are waitlisted and that said office is unable to
reinstate them (Annex B-Velasco's to Exh. 6).
Since the flight involved was still more than a
month away and confident that reinstatement
would be made, Herranz forgot the matter and told
no one about it except his co-employee, either
Armando Davila or Pedro Asensi or both of them
(Tsn., 123-124, 127, Nov. 17, 1961).
Subsequently, on April 27, 1960, Armando Davila,
PAN-AM's reservations employee working in the
same Escolta office as Herranz, phoned PAN-
AM's ticket sellers at its other office in the Manila
Hotel, and confirmed the reservations of Senator
Lopez and party.
PAN-AM's reservations supervisor Alberto Jose,
discovered Herranz's mistake after "Your Travel
Guide" phone on May 18, 1960 to state that
Senator Lopez and party were going to depart as
scheduled. Accordingly, Jose sent a telex wire on
that date to PAN-AM's head office at San
Francisco to report the error and asked said office
to continue holding the reservations of Senator
Lopez and party (Annex B-Acker's to Exh. 6). Said
message was reiterated by Jose in his telex wire
of May 19, 1960 (Annex C-Acker's to Exh. 6). San
Francisco head office replied on May 19, 1960 that
it regrets being unable to confirm Senator Lopez
and party for the reason that the flight was solidly
booked (Exh. 7). Jose sent a third telex wire on
160
May 20, 1960 addressed to PAN-AM's offices at
San Francisco, New York (Idlewild Airport), Tokyo
and Hongkong, asking all-out assistance towards
restoring the cancelled spaces and for report of
cancellations at their end (Annex D-Acker's to Exh.
6). San Francisco head office reiterated on May
20, 1960 that it could not reinstate the spaces and
referred Jose to the Tokyo and Hongkong offices
(Exh. 8). Also on May 20, the Tokyo office of PAN-
AM wired Jose stating it will do everything possible
(Exh. 9).
Expecting that some cancellations of bookings
would be made before the flight time, Jose decided
to withhold from Senator Lopez and party, or their
agent, the information that their reservations had
been cancelled.
Armando Davila having previously confirmed
Senator Lopez and party's first class reservations
to PAN-AM's ticket sellers at its Manila Hotel
office, the latter sold and issued in their favor the
corresponding first class tickets on the 21st and
23rd of May, 1960.
From the foregoing evidence of defendant it is in
effect admitted that defendant — through its
agents — first cancelled plaintiffs, reservations by
mistake and thereafter deliberately and
intentionally withheld from plaintiffs or their travel
agent the fact of said cancellation, letting them go
on believing that their first class reservations stood
valid and confirmed. In so misleading plaintiffs into
purchasing first class tickets in the conviction that
they had confirmed reservations for the same,
when in fact they had none, defendant wilfully and
knowingly placed itself into the position of having
to breach its a foresaid contracts with plaintiffs
should there be no last-minute cancellation by
other passengers before flight time, as it turned out
in this case. Such actuation of defendant may
indeed have been prompted by nothing more than
the promotion of its self-interest in holding on to
Senator Lopez and party as passengers in its flight
and foreclosing on their chances to seek the
services of other airlines that may have been able
to afford them first class accommodations. All the
time, in legal contemplation such conduct already
amounts to action in bad faith. For bad faith means
a breach of a known duty through some motive
of interest or ill-will (Spiegel vs. Beacon
Participations, 8 NE 2d 895, 907). As stated in
Kamm v. Flink, 113 N.J.L. 582, 175 A. 62, 99
A.L.R. 1, 7: "Self-enrichment or fraternal interest,
and not personal ill-will, may well have been the
motive; but it is malice nevertheless."
As of May 18, 1960 defendant's reservations
supervisor, Alberto Jose knew that plaintiffs'
reservations had been cancelled. As of May 20 he
knew that the San Francisco head office stated
with finality that it could not reinstate plaintiffs'
cancelled reservations. And yet said reservations
supervisor made the "decision" — to use his own,
word — to withhold the information from the
plaintiffs. Said Alberto Jose in his testimony:
Q Why did you not notify them?
A Well, you see, sir, in my fifteen (15)
years of service with the air lines business
my experience is that even if the flights are
solidly booked months in advance, usually
the flight departs with plenty of empty
seats both on the first class and tourist
class. This is due to late cancellation of
passengers, or because passengers do
not show up in the airport, and it was our
hope others come in from another flight
and, therefore, are delayed and, therefore,
missed their connections. This experience
of mine, coupled with that wire from Tokyo
that they would do everything possible
prompted me to withhold the information,
but unfortunately, instead of the first class
seat that I was hoping for and which I
anticipated only the tourists class was
open on which Senator and Mrs. Lopez,
Mr. and Mrs. Montelibano were
accommodated. Well, I fully realize now
the gravity of my decision in not advising
Senator and Mrs. Lopez, Mr. and Mrs.
Montelibano nor their agents about the
erroneous cancellation and for which I
would like them to know that I am very
sorry.
xxx xxx xxx
Q So it was not your duty to notify Sen.
Lopez and parties that their reservations
had been cancelled since May 18, 1960?
A As I said before it was my duty. It was
my duty but as I said again with respect to
that duty I have the power to make a
decision or use my discretion and
judgment whether I should go ahead and
tell the passenger about the cancellation.
(Tsn., pp. 17-19, 28-29, March 15, 1962.)
At the time plaintiffs bought their tickets,
defendant, therefore, in breach of its known duty,
made plaintiffs believe that their reservation
had not been cancelled. An additional indication of
161
this is the fact that upon the face of the two tickets
of record, namely, the ticket issued to Alfredo
Montelibano, Jr. on May 21, 1960 (Exh. 22) and
that issued to Mrs. Alfredo Montelibano, Jr., on
May 23, 1960 (Exh. 23), the reservation status is
stated as "OK". Such willful-non-disclosure of the
cancellation or pretense that the reservations for
plaintiffs stood — and not simply the erroneous
cancellation itself — is the factor to which is
attributable the breach of the resulting contracts.
And, as above-stated, in this respect defendant
clearly acted in bad faith.
As if to further emphasize its bad faith on the
matter, defendant subsequently promoted the
employee who cancelled plaintiffs' reservations
and told them nothing about it. The record shows
that said employee — Mariano Herranz — was not
subjected to investigation and suspension by
defendant but instead was given a reward in the
form of an increase of salary in June of the
following year (Tsn., 86-88, Nov. 20, 1961).
At any rate, granting all the mistakes advanced by
the defendant, there would at least be negligence
so gross and reckless as to amount to malice or
bad faith (Fores vs. Miranda, L-12163, March 4,
1959; Necesito v. Paras, L-10605-06, June 30,
1958). Firstly, notwithstanding the entries in the
reservation cards (Exhs. 1 & 3) that the
reservations cancelled are those of the Rufinos
only, Herranz made the mistake, after reading said
entries, of sending a wire cancelling all the
reservations, including those of Senator Lopez
and party (Tsn., pp. 108-109, Nov. 17, 1961).
Secondly, after sending a wire to San Francisco
head office on April 19, 1960 stating his error and
asking for reinstatement, Herranz simply forgot
about the matter. Notwithstanding the reply of San
Francisco head Office on April 22, 1960 that it
cannot reinstate Senator Lopez and party (Annex
B-Velasco's to Exh. 6), it was assumed and taken
for granted that reinstatement would be made.
Thirdly, Armando Davila confirmed plaintiff's
reservations in a phone call on April 27, 1960 to
defendant's ticket sellers, when at the time it
appeared in plaintiffs' reservation card (Exh. 5)
that they were only waitlisted passengers.
Fourthly, defendant's ticket sellers issued plaintiffs'
tickets on May 21 and 23, 1960, without first
checking their reservations just before issuing said
tickets. And, finally, no one among defendant's
agents notified Senator Lopez and party that their
reservations had been cancelled, a precaution that
could have averted their entering with defendant
into contracts that the latter had already placed
beyond its power to perform.
Accordingly, there being a clear admission in
defendant's evidence of facts amounting to a bad
faith on its part in regard to the breach of its
contracts with plaintiffs, it becomes unnecessary
to further discuss the evidence adduced by
plaintiffs to establish defendant's bad faith. For
what is admitted in the course of the trial does not
need to be proved (Sec. 2, Rule 129, Rules of
Court).
Addressing ourselves now to the question of
damages, it is well to state at the outset those rules
and principles. First, moral damages are
recoverable in breach of contracts where the
defendant acted fraudulently or in bad faith (Art.
2220, New Civil Code). Second, in addition to
moral damages, exemplary or corrective damages
may be imposed by way of example or correction
for the public good, in breach of contract where the
defendant acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner (Articles 2229,
2232, New Civil Code). And, third, a written
contract for an attorney's services shall control the
amount to be paid therefor unless found by the
court to be unconscionable or unreasonable (Sec.
24, Rule 138, Rules of Court).
First, then, as to moral damages. As a proximate
result of defendant's breach in bad faith of its
contracts with plaintiffs, the latter suffered social
humiliation, wounded feelings, serious anxiety and
mental anguish. For plaintiffs were travelling with
first class tickets issued by defendant and yet they
were given only the tourist class. At stop-overs,
they were expected to be among the first-class
passengers by those awaiting to welcome them,
only to be found among the tourist passengers. It
may not be humiliating to travel as tourist
passengers; it is humiliating to be compelled to
travel as such, contrary to what is rightfully to be
expected from the contractual undertaking.
Senator Lopez was then Senate President Pro
Tempore. International carriers like defendant
know the prestige of such an office. For the Senate
is not only the Upper Chamber of the Philippine
Congress, but the nation's treaty-ratifying body. It
may also be mentioned that in his aforesaid office
Senator Lopez was in a position to preside in
impeachment cases should the Senate sit as
Impeachment Tribunal. And he was former Vice-
President of the Philippines. Senator Lopez was
going to the United States to attend a private
business conference of the Binalbagan-Isabela
Sugar Company; but his aforesaid rank and
position were by no means left behind, and in fact
he had a second engagement awaiting him in the
United States: a banquet tendered by Filipino
friends in his honor as Senate President Pro
162
Tempore (Tsn., pp. 14-15, Nov. 25, 1960). For the
moral damages sustained by him, therefore, an
award of P100,000.00 is appropriate.
Mrs. Maria J. Lopez, as wife of Senator Lopez,
shared his prestige and therefore his humiliation.
In addition she suffered physical discomfort during
the 13-hour trip,(5 hours from Tokyo to Honolulu
and 8 hours from Honolulu to San Francisco).
Although Senator Lopez stated that "she was quite
well" (Tsn., p. 22, Nov. 25, 1960) — he obviously
meant relatively well, since the rest of his
statement is that two months before, she was
attackedby severe flu and lost 10 pounds of weight
and that she was advised by Dr. Sison to go to the
United States as soon as possible for medical
check-up and relaxation, (Ibid). In fact, Senator
Lopez stated, as shown a few pages after in the
transcript of his testimony, that Mrs. Lopez was
sick when she left the Philippines:
A. Well, my wife really felt very bad during
the entire trip from Tokyo to San
Francisco. In the first place, she was sick
when we left the Philippines, and then with
that discomfort which she [experienced] or
suffered during that evening, it was her
worst experience. I myself, who was not
sick, could not sleep because of the
discomfort. (Tsn., pp. 27-28, Nov. 25,
1960).
It is not hard to see that in her condition then a
physical discomfort sustained for thirteen hours
may well be considered a physical suffering. And
even without regard to the noise and trepidation
inside the plane — which defendant contends,
upon the strengh of expert testimony, to be
practically the same in first class and tourist class
— the fact that the seating spaces in the tourist
class are quite narrower than in first class, there
beingsix seats to a row in the former as against
four to a row in the latter, and that in tourist class
there is very little space for reclining in view of the
closer distance between rows (Tsn., p. 24, Nov.
25, 1960), will suffice to show that the aforesaid
passenger indeed experienced physical suffering
during the trip. Added to this, of course, was the
painfull thought that she was deprived by
defendant — after having paid for and expected
the same — of the most suitable, place for her, the
first class, where evidently the best of everything
would have been given her, the best seat, service,
food and treatment. Such difference in comfort
between first class and tourist class is too obvious
to be recounted, is in fact the reason for the
former's existence, and is recognized by the airline
in charging a higher fare for it and by the
passengers in paying said higher rate Accordingly,
considering the totality of her suffering and
humiliation, an award to Mrs. Maria J. Lopez of
P50,000.00 for moral damages will be reasonable.
Mr. and Mrs. Alfredo Montelibano, Jr., were
travelling as immediate members of the family of
Senator Lopez. They formed part of the Senator's
party as shown also by the reservation cards of
PAN-AM. As such they likewise shared his
prestige and humiliation. Although defendant
contends that a few weeks before the flight they
had asked their reservations to be charged from
first class to tourist class — which did not
materialize due to alleged full booking in the tourist
class — the same does not mean they suffered no
shared in having to take tourist class during the
flight. For by that time they had already been made
to pay for first class seats and therefore to expect
first class accommodations. As stated, it is one
thing to take the tourist class by free choice; a far
different thing to be compelled to take it
notwithstanding having paid for first class seats.
Plaintiffs-appellants now ask P37,500.00 each for
the two but we note that in their motion for
reconsideration filed in the court a quo, they were
satisfied with P25,000.00 each for said persons.
(Record on Appeal, p. 102). For their social
humiliation, therefore, the award to them of
P25,000.00 each is reasonable.
The rationale behind exemplary or corrective
damages is, as the name implies, to provide an
example or correction for public good. Defendant
having breached its contracts in bad faith, the
court, as stated earlier, may award exemplary
damages in addition to moral damages (Articles
2229, 2232, New Civil Code).
In view of its nature, it should be imposed in such
an amount as to sufficiently and effectively deter
similar breach of contracts in the future by
defendant or other airlines. In this light, we find it
just to award P75,000.00 as exemplary or
corrective damages.
Now, as to attorney's fees, the record shows a
written contract of services executed on June 1,
1960 (Exh. F) whereunder plaintiffs-appellants
engaged the services of their counsel — Atty.
Vicente J. Francisco — and agreedto pay the sum
of P25,000.00 as attorney's fees upon the
termination of the case in the Court of First
Instance, and an additional sum of P25,000.00 in
the event the case is appealed to the Supreme
Court. As said earlier, a written contract for
attorney's services shall control the amount to be
paid therefor unless found by the court to be
unconscionable or unreasonable. A consideration
163
of the subject matter of the present controversy, of
the professional standing of the attorney for
plaintiffs-appellants, and of the extent of the
service rendered by him, shows that said amount
provided for in the written agreement is
reasonable. Said lawyer — whose prominence in
the legal profession is well known — studied the
case, prepared and filed the complaint, conferred
with witnesses, analyzed documentary evidence,
personally appeared at the trial of the case in
twenty-two days, during a period of three years,
prepared four sets of cross-interrogatories for
deposition taking, prepared several memoranda
and the motion for reconsideration, filed a joint
record on appeal with defendant, filed a brief for
plaintiffs as appellants consisting of 45 printed
pages and a brief for plaintiffs as appellees
consisting of 265 printed pages. And we are further
convinced of its reasonableness because
defendant's counsel likewise valued at P50,000.00
the proper compensation for his services rendered
to defendant in the trial court and on appeal.
In concluding, let it be stressed that the amount of
damages awarded in this appeal has been
determined by adequately considering the official,
political, social, and financial standing of the
offended parties on one hand, and the business
and financial position of the offender on the other
(Domingding v. Ng, 55 O.G. 10). And further
considering the present rate of exchange and the
terms at which the amount of damages awarded
would approximately be in U.S. dollars, this Court
is all the more of the view that said award is proper
and reasonable.
Wherefore, the judgment appealed from is hereby
modified so as to award in favor of plaintiffs and
against defendant, the following: (1) P200,000.00
as moral damages, divided among plaintiffs, thus:
P100,000.00 for Senate President Pro
Tempore Fernando Lopez; P50,000.00 for his wife
Maria J. Lopez; P25,000.00 for his son-in-law
Alfredo Montelibano, Jr.; and P25,000.00 for his
daughter Mrs. Alfredo Montelibano, Jr.; (2)
P75,000.00 as exemplary or corrective damages;
(3) interest at the legal rate of 6% per annum on
the moral and exemplary damages aforestated,
from December 14, 1963, the date of the amended
decision of the court a quo, until said damages are
fully paid; (4) P50,000.00 as attorney's fees; and
(5) the costs. Counterclaim dismissed.So ordered.
Bengzon, C.J., Bautista Angelo, Concepcion,
Reyes, J.B.L., Barrera, Regala, Makalintal,
Zaldivar and Sanchez, JJ., concur.
Dizon, J., is on leave.
THIRD DIVISION
G.R. No. 152753 January 13, 2004
IGLECERIO MAHINAY, petitioner,
vs.
ATTY. GABINO A. VELASQUEZ,
JR., respondent.
DECISION
CORONA, J.:
Before us is a petition for review of the
decision1 dated December 20, 2001 of the Court of
Appeals affirming with modification the "order and
resolution" dated October 31, 1977 of the Regional
Trial Court, Branch 16, Naval, Biliran in Civil Case
No. B-0923, for damages.
The instant case arose from the alleged
defamatory remarks of petitioner Iglecerio
Mahinay against respondent Gabino A.
Velasquez, Jr.
According to Olipio Machete, overseer of
respondent, petitioner uttered the following
malicious and insulting statement against
respondent: "Your master, a candidate for
Congressman, Ben Velasquez, is a land grabber."
Machete informed respondent of what petitioner
said about him. This impelled respondent to file a
complaint for damages against petitioner, claiming
that his utterances besmirched his and his family’s
reputation and caused him anxiety, mental
anguish and sleepless nights.
As no amicable settlement could be reached by
the parties, trial on the merits ensued. The trial
court eventually ruled in favor of respondent on the
basis of the sole testimony of Machete and
awarded to respondent moral damages in the
amount of P100,000 and exemplary damages in
the amount of P50,000.2 No other evidence was
adduced by either party.
Petitioner appealed to the Court of Appeals
alleging that the trial court order lacked factual
basis. The Court of Appeals, however, modified
the award, as follows:
164
 "WHEREFORE, with the MODIFICATION
that the award for moral and exemplary
damages is hereby reduced to P50,000.00
and P25,000.00, respectively, the decision
appealed from is hereby AFFIRMED and
this appeal DISMISSED.
SO ORDERED."3
His motion for reconsideration having been
denied, petitioner comes to this Court arguing that
the appellate court gravely erred in: (a) affirming
the trial court order despite the lack of sufficient
factual basis and (b) awarding moral and
exemplary damages to respondent despite his
failure to take the witness stand.4
We agree.
In order that moral damages may be awarded,
there must be pleading and proof of moral
suffering, mental anguish, fright and the
like.5 While respondent alleged in his complaint
that he suffered mental anguish, serious anxiety,
wounded feelings and moral shock, he failed to
prove them during the trial. Indeed, respondent
should have taken the witness stand and should
have testified on the mental anguish, serious
anxiety, wounded feelings and other emotional
and mental suffering he purportedly suffered to
sustain his claim for moral damages. Mere
allegations do not suffice; they must be
substantiated by clear and convincing proof.6 No
other person could have proven such damages
except the respondent himself as they were
extremely personal to him.
In Keirulf vs. Court of Appeals,7 we held:
"While no proof of pecuniary loss is
necessary in order that moral damages
may be awarded, the amount of indemnity
being left to the discretion of the court, it is
nevertheless essential that the claimant
should satisfactorily show the existence of
the factual basis of damages and its causal
connection to defendant’s acts. This is so
because moral damages, though
incapable of pecuniary estimation, are in
the category of an award designed to
compensate the claimant for actual injury
suffered and not to impose a penalty on
the wrongdoer. In Francisco vs. GSIS, the
Court held that there must be clear
testimony on the anguish and other forms
of mental suffering. Thus, if the plaintiff
fails to take the witness stand and testify
as to his/her social humiliation, wounded
feelings and anxiety, moral damages
cannot be awarded. In Cocoland
Development Corporation vs. National
labor Relations Commission, the Court
held that "additional facts must be pleaded
and proven to warrant the grant of moral
damages under the Civil Code, these
being, x x x social humiliation, wounded
feelings, grave anxiety, etc. that resulted
therefrom."
The testimony of Machete was not enough
evidence of the moral damages that the
respondent supposedly suffered. Machete may
have clearly testified on the specific words uttered
by petitioner against respondent but he could not
have testified on the wounded feelings respondent
allegedly went through by reason of petitioner’s
slanderous remark. The award of moral damages
must be anchored to a clear showing that
respondent actually experienced mental anguish,
besmirched reputation, sleepless nights, wounded
feelings or similar injury. There was no better
witness to this experience than respondent
himself. Since respondent failed to testify on the
witness stand, the trial court did not have any
factual basis to award moral damages to him.
Neither is respondent entitled to exemplary
damages. "If the court has no proof or evidence
upon which the claim for moral damages could be
based, such indemnity could not be outrightly
awarded. The same holds true with respect to the
award of exemplary damages where it must be
shown that the party acted in a wanton, oppressive
or malevolent manner."8 Furthermore, this specie
of damages is allowed only in addition to moral
damages such that no exemplary damages can be
awarded unless the claimant first establishes his
clear right to moral damages.
The affirmance of the Court of Appeals of the ruling
of the trial court is therefore not in order as it lacked
sufficient factual basis.
WHEREFORE, the decision of the Court of
Appeals is hereby REVERSED and SET ASIDE.
The complaint for damages in Civil Case No. B-
0923 against herein petitioner is hereby
DISMISSED. No costs.
SO ORDERED.
Vitug, (Chairman), Sandoval-Gutierrez, and
Carpio-Morales, JJ., concur.
165
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 110398 November 7, 1997
NEGROS NAVIGATION CO., INC., petitioner,
vs.
THE COURT OF APPEALS, RAMON
MIRANDA, SPS. RICARDO and VIRGINIA DE
LA VICTORIA, respondents.
MENDOZA, J.:
This is a petition for review on certiorari of the
decision of the Court of Appeals affirming with
modification the Regional Trial Court's award of
damages to private respondents for the death of
relatives as a result of the sinking of petitioner's
vessel.
In April of 1980, private respondent Ramon
Miranda purchased from the Negros Navigation
Co., Inc. four special cabin tickets (#74411, 74412,
74413 and 74414) for his wife, daughter, son and
niece who were going to Bacolod City to attend a
family reunion. The tickets were for Voyage No.
457-A of the M/V Don Juan, leaving Manila at 1:00
p.m. on April 22, 1980.
The ship sailed from the port of Manila on
schedule.
At about 10:30 in the evening of April 22, 1980,
the Don Juan collided off the Tablas Strait in
Mindoro, with the M/T Tacloban City, an oil tanker
owned by the Philippine National Oil Company
(PNOC) and the PNOC Shipping and Transport
Corporation (PNOC/STC). As a result, the
M/V Don Juan sank. Several of her passengers
perished in the sea tragedy. The bodies of some
of the victims were found and brought to shore, but
the four members of private respondents' families
were never found.
Private respondents filed a complaint on July 16,
1980 in the Regional Trial Court of Manila, Branch
34, against the Negros Navigation, the Philippine
National Oil Company (PNOC), and the PNOC
Shipping and Transport Corporation (PNOC/STC),
seeking damages for the death of Ardita de la
Victoria Miranda, 48, Rosario V. Miranda, 19,
Ramon V. Miranda, Jr., 16, and Elfreda de la
Victoria, 26.
In its answer, petitioner admitted that private
respondents purchased ticket numbers 74411,
74412, 74413 and 74414; that the ticket numbers
were listed in the passenger manifest; and that
the Don Juan left Pier 2, North Harbor, Manila on
April 22, 1980 and sank that night after being
rammed by the oil tanker M/T Tacloban City, and
that, as a result of the collision, some of the
passengers of the M/V Don Juan died. Petitioner,
however, denied that the four relatives of private
respondents actually boarded the vessel as shown
by the fact that their bodies were never recovered.
Petitioner further averred that the Don Juan was
seaworthy and manned by a full and competent
crew, and that the collision was entirely due to the
fault of the crew of the M/T Tacloban City.
On January 20, 1986, the PNOC and petitioner
Negros Navigation Co., Inc. entered into a
compromise agreement whereby petitioner
assumed full responsibility for the payment and
satisfaction of all claims arising out of or in
connection with the collision and releasing the
PNOC and the PNOC/STC from any liability to it.
The agreement was subsequently held by the trial
court to be binding upon petitioner, PNOC and
PNOC/STC. Private respondents did not join in the
agreement.
After trial, the court rendered judgment on
February 21, 1991, the dispositive portion of which
leads as follows:
WHEREFORE, in view of the foregoing,
judgment is hereby rendered in favor of the
plaintiffs, ordering all the defendants to
pay jointly and severally to the plaintiffs
damages as follows:
To Ramon Miranda:
P42,025.00 for actual damages;
P152,654.55 as compensatory
damages for loss of earning capacity
of his wife;
P90,000.00 as compensatory
damages for wrongful death of three
(3) victims;
P300,000.00 as moral damages;
P50,000.00 as exemplary damages,
all in the total amount of P634,679.55;
and
P40,000.00 as attorney's fees.
166
 To Spouses Ricardo and Virginia de la
Victoria:
P12,000.00 for actual damages;
P158,899.00 as compensatory
damages for loss of earning capacity;
P30,000.00 as compensatory
damages for wrongful death;
P100,000.00 as moral damages;
P20,000.00 as exemplary damages,
all in the total amount of P320,899.00;
and
P15,000.00 as attorney's fees.
On appeal, the Court of Appeals1 affirmed the
decision of the Regional Trial Court with
modification —
1. Ordering and sentencing defendants-
appellants, jointly and severally, to pay
plaintiff-appellee Ramon Miranda the
amount of P23,075.00 as actual damages
instead of P42,025.00;
2. Ordering and sentencing defendants-
appellants, jointly and severally, to pay
plaintiff-appellee Ramon Miranda the
amount of P150,000.00, instead of
P90,000.00, as compensatory damages
for the death of his wife and two children;
3. Ordering and sentencing defendants-
appellants, jointly and severally, to pay
plaintiffs-appellees Dela Victoria spouses
the amount of P50,000.00, instead of
P30,000.00, as compensatory damages
for the death of their daughter Elfreda Dela
Victoria;
Hence this petition, raising the following issues:
(1) whether the members of private respondents'
families were actually passengers of the Don
Juan;
(2) whether the ruling in Mecenas v. Court of
Appeals,2 finding the crew members of petitioner to
be grossly negligent in the performance of their
duties, is binding in this case;
(3) whether the total loss of the M/V Don
Juan extinguished petitioner's liability; and
(4) whether the damages awarded by the
appellate court are excessive, unreasonable and
unwarranted.
First. The trial court held that the fact that the
victims were passengers of the M/V Don Juan was
sufficiently proven by private respondent Ramon
Miranda, who testified that he purchased tickets
numbered 74411, 74412, 74413, and 74414 at
P131.30 each from the Makati office of petitioner
for Voyage No. 47-A of the M/V Don Juan, which
was leaving Manila on April 22, 1980. This was
corroborated by the passenger manifest (Exh. E)
on which the numbers of the tickets and the names
of Ardita Miranda and her children and Elfreda de
la Victoria appear.
Petitioner contends that the purchase of the tickets
does not necessarily mean that the alleged victims
actually took the trip. Petitioner asserts that it is
common knowledge that passengers purchase
tickets in advance but do not actually use them.
Hence, private respondent should also prove the
presence of the victims on the ship. The witnesses
who affirmed that the victims were on the ship
were biased and unreliable.
This contention is without merit. Private
respondent Ramon Miranda testified that he
personally took his family and his niece to the
vessel on the day of the voyage and stayed with
them on the ship until it was time for it to leave.
There is no reason he should claim members of
his family to have perished in the accident just to
maintain an action. People do not normally lie
about so grave a matter as the loss of dear ones.
It would be more difficult for private respondents to
keep the existence of their relatives if indeed they
are alive than it is for petitioner to show the
contrary. Petitioner's only proof is that the bodies
of the supposed victims were not among those
recovered from the site of the mishap. But so were
the bodies of the other passengers reported
missing not recovered, as this Court noted in
the Mecenas3 case.
Private respondent Miranda's testimony was
corroborated by Edgardo Ramirez. Ramirez was a
seminarian and one of the survivors of the
collision. He testified that he saw Mrs. Miranda and
Elfreda de la Victoria on the ship and that he talked
with them. He knew Mrs. Miranda who was his
teacher in the grade school. He also knew Elfreda
who was his childhood friend and townmate.
Ramirez said he was with Mrs. Miranda and her
children and niece from 7:00 p.m. until 10:00 p.m.
when the collision happened and that he in fact
had dinner with them. Ramirez said he and Elfreda
167
stayed on the deck after dinner and it was there
where they were jolted by the collision of the two
vessels. Recounting the moments after the
collision, Ramirez testified that Elfreda ran to fetch
Mrs. Miranda. He escorted her to the room and
then tried to go back to the deck when the lights
went out. He tried to return to the cabin but was
not able to do so because it was dark and there
was a stampede of passengers from the deck.
Petitioner casts doubt on Ramirez' testimony,
claiming that Ramirez could not have talked with
the victims for about three hours and not run out of
stories to tell, unless Ramirez had a "storehouse"
of stories. But what is incredible about
acquaintances thrown together on a long journey
staying together for hours on end, in idle
conversation precisely to while the hours away?
Petitioner also points out that it took Ramirez three
(3) days before he finally contacted private
respondent Ramon Miranda to tell him about the
fate of his family. But it is not improbable that it
took Ramirez three days before calling on private
respondent Miranda to tell him about the last hours
of Mrs. Miranda and her children and niece, in view
of the confusion in the days following the collision
as rescue teams and relatives searched for
survivors.
Indeed, given the facts of this case, it is improper
for petitioner to even suggest that private
respondents' relatives did not board the ill-fated
vessel and perish in the accident simply because
their bodies were not recovered.
Second. In finding petitioner guilty of negligence
and in failing to exercise the extraordinary
diligence required of it in the carriage of
passengers, both the trial court and the appellate
court relied on the findings of this Court
in Mecenas v. Intermediate Appellate
Court,4 which case was brought for the death of
other passengers. In that case it was found that
although the proximate cause of the mishap was
the negligence of the crew of the M/T Tacloban
City, the crew of the Don Juan was equally
negligent as it found that the latter's master, Capt.
Rogelio Santisteban, was playing mahjong at the
time of collision, and the officer on watch, Senior
Third Mate Rogelio De Vera, admitted that he
failed to call the attention of Santisteban to the
imminent danger facing them. This Court found
that Capt. Santisteban and the crew of the
M/V Don Juan failed to take steps to prevent the
collision or at least delay the sinking of the ship
and supervise the abandoning of the ship.
Petitioner Negros Navigation was found equally
negligent in tolerating the playing of mahjong by
the ship captain and other crew members while on
board the ship and failing to keep the M/V Don
Juan seaworthy so much so that the ship sank
within 10 to 15 minutes of its impact with the
M/T Tacloban City.
In addition, the Court found that the Don Juan was
overloaded. The Certificate of Inspection, dated
August 27, 1979, issued by the Philippine Coast
Guard Commander at Iloilo City stated that the
total number of persons allowed on the ship was
864, of whom 810 are passengers, but there were
actually 1,004 on board the vessel when it sank,
140 persons more than the maximum number that
could be safely carried by it.
Taking these circumstances together, and the fact
that the M/V Don Juan, as the faster and better-
equipped vessel, could have avoided a collision
with the PNOC tanker, this Court held that even if
the Tacloban City had been at fault for failing to
observe an internationally-recognized rule of
navigation, the Don Juan was guilty of contributory
negligence. Through Justice Feliciano, this Court
held:
The grossness of the negligence of the
"Don Juan" is underscored when one
considers the foregoing circumstances in
the context of the following facts: Firstly,
the "Don Juan" was more than twice as
fast as the "Tacloban City." The "Don
Juan's" top speed was 17 knots; while that
of the "Tacloban City" was 6.3. knots.
Secondly, the "Don Juan" carried the full
complement of officers and crew members
specified for a passenger vessel of her
class. Thirdly, the "Don Juan" was
equipped with radar which was functioning
that night. Fourthly, the "Don Juan's officer
on-watch had sighted the "Tacloban City"
on his radar screen while the latter was still
four (4) nautical miles away. Visual
confirmation of radar contact was
established by the "Don Juan" while the
"Tacloban City" was still 2.7 miles away. In
the total set of circumstances which
existed in the instant case, the "Don Juan,"
had it taken seriously its duty of
extraordinary diligence, could have easily
avoided the collision with the "Tacloban
City." Indeed, the "Don Juan" might well
have avoided the collision even if it had
exercised ordinary diligence merely.
168
 It is true that the "Tacloban City" failed to
follow Rule 18 of the International Rules of
the Road which requires two (2) power-
driven vessels meeting end on or nearly
end on each to alter her course to
starboard (right) so that each vessel may
pass on the port side (left) of the other. The
"Tacloban City," when the two (2) vessels
were only three-tenths (0.3) of a mile apart,
turned (for the second time) 15° to port
side while the "Don Juan" veered hard to
starboard. . . . [But] "route observance" of
the International Rules of the Road will not
relieve a vessel from responsibility if the
collision could have been avoided by
proper care and skill on her part or even by
a departure from the rules.
In the petition at bar, the "Don Juan"
having sighted the "Tacloban City" when it
was still a long way off was negligent in
failing to take early preventive action and
in allowing the two (2) vessels to come to
such close quarters as to render the
collision inevitable when there was no
necessity for passing so near to the
"Tacloban City" as to create that hazard or
inevitability, for the "Don Juan" could
choose its own distance. It is noteworthy
that the "Tacloban City," upon turning hard
to port shortly before the moment of
collision, signalled its intention to do so by
giving two (2) short blasts with its horn.
The "Don Juan" gave no answering horn
blast to signal its own intention and
proceeded to turn hard to starboard.
We conclude that Capt. Santisteban and
Negros Navigation are properly held liable
for gross negligence in connection with the
collision of the "Don Juan" and "Tacloban
City" and the sinking of the "Don Juan"
leading to the death of hundreds of
passengers. . . .5
Petitioner criticizes the lower court's reliance on
the Mecenas case, arguing that, although this
case arose out of the same incident as that
involved in Mecenas, the parties are different and
trial was conducted separately. Petitioner
contends that the decision in this case should be
based on the allegations and defenses pleaded
and evidence adduced in it or, in short, on the
record of this case.
The contention is without merit. What petitioner
contends may be true with respect to the merits of
the individual claims against petitioner but not as
to the cause of the sinking of its ship on April 22,
1980 and its liability for such accident, of which
there can only be one truth. Otherwise, one would
be subscribing to the sophistry: truth on one side
of the Pyrenees, falsehood on the other!
Adherence to the Mecenas case is dictated by this
Court's policy of maintaining stability in
jurisprudence in accordance with the legal
maxim "stare decisis et non quieta
movere" (Follow past precedents and do not
disturb what has been settled.) Where, as in this
case, the same questions relating to the same
event have been put forward by parties similarly
situated as in a previous case litigated and decided
by a competent court, the rule of stare decisis is a
bar to any attempt to relitigate the same
issue.6 In Woulfe v. Associated Realties
Corporation,7 the Supreme Court of New Jersey
held that where substantially similar cases to the
pending case were presented and applicable
principles declared in prior decisions, the court
was bound by the principle of stare decisis.
Similarly, in State ex rel. Tollinger v. Gill,8 it was
held that under the doctrine of stare decisis a ruling
is final even as to parties who are strangers to the
original proceeding and not bound by the judgment
under the res judicata doctrine. The Philadelphia
court expressed itself in this wise: "Stare decisis
simply declares that, for the sake of certainty, a
conclusion reached in one case should be applied
to those which follow, if the facts are substantially
the same, even though the parties may be
different."9 Thus, in J.M. Tuason
v. Mariano, supra, this Court relied on its rulings in
other cases involving different parties in sustaining
the validity of a land title on the principle of "stare
decisis et non quieta movere."
Indeed, the evidence presented in this case was
the same as those presented in
the Mecenas case, to wit:
Document Mecenas case This case
Decision of Commandant, Exh. 10 10 Exh.
11-B-NN/X
Phil. Coast Guard in BMI Case No. 415-80
dated 3/26/81
Decision of the Minister Exh. 11 11 Exh. ZZ
of National Defense dated 3/12/82
Resolution on the Exh. 13 12 Exh. AAA
motion for reconsideration (private
of the decision of the respondents)
Minister of National defense dated 7/27/84
169
 Certificate of Exh. 1-A 13 Exh. 19-NN
inspection dated 8/27/79
Certificate of Stability Exh. 6-A 14 Exh. 19-
D-NN dated 12/16/76
Nor is it true that the trial court merely based its
decision on the Mecenas case. The trial court
made its own independent findings on the basis of
the testimonies of witnesses, such as Senior Third
Mate Rogelio de Vera, who incidentally gave
substantially the same testimony on petitioner's
behalf before the Board of Marine Inquiry. The trial
court agreed with the conclusions of the then
Minister of National Defense finding both vessels
to be negligent.
Third. The next issue is whether petitioner is liable
to pay damages notwithstanding the total loss of
its ship. The issue is not one of first impression.
The rule is well-entrenched in our jurisprudence
that a shipowner may be held liable for injuries to
passengers notwithstanding the exclusively real
and hypothecary nature of maritime law if fault can
be attributed to the shipowner. 15
In Mecenas, this Court found petitioner guilty of
negligence in (1) allowing or tolerating the ship
captain and crew members in playing mahjong
during the voyage, (2) in failing to maintain the
vessel seaworthy and (3) in allowing the ship to
carry more passengers than it was allowed to
carry. Petitioner is, therefore, clearly liable for
damages to the full extent.
Fourth. Petitioner contends that, assuming that
the Mecenas case applies, private respondents
should be allowed to claim only P43,857.14 each
as moral damages because in the Mecenas case,
the amount of P307,500.00 was awarded to the
seven children of the Mecenas couple. Under
petitioner's formula, Ramon Miranda should
receive P43,857.14, while the De la Victoria
spouses should receive P97,714.28.
Here is where the principle of stare decisis does
not apply in view of differences in the personal
circumstances of the victims. For that matter,
differentiation would be justified even if private
respondents had joined the private respondents in
the Mecenas case. The doctrine of stare decisis
works as a bar only against issues litigated in a
previous case. Where the issue involved was not
raised nor presented to the court and not passed
upon by the court in the previous case, the
decision in the previous case is not stare decisis of
the question presently presented. 16 The decision
in the Mecenas case relates to damages for which
petitioner was liable to the claimants in that case.
In the case at bar, the award of P300,000.00 for
moral damages is reasonable considering the grief
petitioner Ramon Miranda suffered as a result of
the loss of his entire family. As a matter of fact,
three months after the collision, he developed a
heart condition undoubtedly caused by the strain
of the loss of his family. The P100,000.00 given to
Mr. and Mrs. de la Victoria is likewise reasonable
and should be affirmed.
As for the amount of civil indemnity awarded to
private respondents, the appellate court's award of
P50,000.00 per victim should be sustained. The
amount of P30,000.00 formerly set in De Lima
v. Laguna Tayabas Co., 17 Heirs of Amparo delos
Santos v. Court of Appeals, 18 and Philippine
Rabbit Bus Lines, Inc. v. Intermediate Appellate
Court 19as benchmark was subsequently increased
to P50,000.00 in the case of Sulpicio Lines,
Inc. v. Court of Appeals, 20which involved the
sinking of another interisland ship on October 24,
1988.
We now turn to the determination of the earning
capacity of the victims. With respect to Ardita
Miranda, the trial court awarded damages
computed as follows: 21
In the case of victim Ardita V. Miranda
whose age at the time of the accident was
48 years, her life expectancy was
computed to be 21.33 years, and
therefore, she could have lived up to
almost 70 years old. Her gross earnings for
21.33 years based on P10,224.00 per
annum, would be P218,077.92. Deducting
therefrom 30% as her living expenses, her
net earnings would be P152,654.55, to
which plaintiff Ramon Miranda is entitled to
compensatory damages for the loss of
earning capacity of his wife. In considering
30% as the living expenses of Ardita
Miranda, the Court takes into account the
fact that plaintiff and his wife were
supporting their daughter and son who
were both college students taking
Medicine and Law respectively.
In accordance with the ruling in Villa-Rey Transit,
Inc. v. Court of Appeals, 22 we think the life
expectancy of Ardita Miranda was correctly
determined to be 21.33 years, or up to age 69.
Petitioner contends, however, that Mrs. Miranda
would have retired from her job as a public school
170
teacher at 65, hence her loss of earning capacity
should be reckoned up to 17.33 years only.
The accepted formula for determining life
expectancy is 2/3 multiplied by (80 minus the age
of the deceased). It may be that in the Philippines
the age of retirement generally is 65 but, in
calculating the life expectancy of individuals for the
purpose of determining loss of earning capacity
under Art. 2206(1) of the Civil Code, it is assumed
that the deceased would have earned income
even after retirement from a particular job. In this
case, the trial court took into account the fact that
Mrs. Miranda had a master's degree and a good
prospect of becoming principal of the school in
which she was teaching. There was reason to
believe that her income would have increased
through the years and she could still earn more
after her retirement, e.g., by becoming a
consultant, had she not died. The gross earnings
which Mrs. Miranda could reasonably be expected
to earn were it not for her untimely death was,
therefore, correctly computed by the trial court to
be P218,077.92 (given a gross annual income of
P10,224.00 and life expectancy of 21.33 years).
Petitioner contends that from the amount of gross
earnings, 60% should be deducted as necessary
living expenses, not merely 30% as the trial court
allowed. Petitioner contends that 30% is
unrealistic, considering that Mrs. Miranda's
earnings would have been subject to taxes, social
security deductions and inflation.
We agree with this contention. In Villa-Rey Transit,
Inc. v. Court of Appeals, 23 the Court allowed a
deduction of P1,184.00 for living expenses from
the P2,184.00 annual salary of the victim, which is
roughly 54.2% thereof. The deceased was 29
years old and a training assistant in the Bacnotan
Cement Industries. In People v. Quilation, 24 the
deceased was a 26-year old laborer earning a
daily wage. The court allowed a deduction of
P120,000.00 which was 51.3% of his annual gross
earnings of P234,000.00. In People
v. Teehankee, 25 the court allowed a deduction of
P19,800.00, roughly 42.4% thereof from the
deceased's annual salary of P46,659.21. The
deceased, Maureen Hultman, was 17 years old
and had just received her first paycheck as a
secretary. In the case at bar, we hold that a
deduction of 50% from Mrs. Miranda's gross
earnings (P218,077.92) would be reasonable, so
that her net earning capacity should be
P109,038.96. There is no basis for supposing that
her living expenses constituted a smaller
percentage of her gross income than the living
expenses in the decided cases. To hold that she
would have used only a small part of her income
for herself, a larger part going to the support of her
children would be conjectural and unreasonable.
As for Elfreda de la Victoria, the trial court found
that, at the time of her death, she was 26 years old,
a teacher in a private school in Malolos, Bulacan,
earning P6,192.00 per annum. Although a
probationary employee, she had already been
working in the school for two years at the time of
her death and she had a general efficiency rating
of 92.85% and it can be presumed that, if not for
her untimely death, she would have become a
regular teacher. Hence, her loss of earning
capacity is P111,456.00, computed as follows:
net earning = life x gross less reasonable
capacity (x) expectancy
annual & necessary income
living expenses
(50%)
x = [2(80-26)] x [P6,192.00 - P3,096.00]
————
3
= 36 x 3,096.00
= P111,456.00
On the other hand, the award of actual damages
in the amount of P23,075.00 was determined by
the Court of Appeals on the basis receipts
submitted by private respondents. This amount is
reasonable considering the expenses incurred by
private respondent Miranda in organizing three
search teams to look for his family, spending for
transportation in going to places such as Batangas
City and Iloilo, where survivors and the bodies of
other victims were found, making long distance
calls, erecting a monument in honor of the four
victims, spending for obituaries in the Bulletin
Today and for food, masses and novenas.
Petitioner's contention that the expenses for the
erection of a monument and other expenses for
memorial services for the victims should be
considered included in the indemnity for death
awarded to private respondents is without merit.
Indemnity for death is given to compensate for
violation of the rights of the deceased, i.e., his right
to life and physical integrity. 26 On the other hand,
damages incidental to or arising out of such death
are for pecuniary losses of the beneficiaries of the
deceased.
As for the award of attorney's fees, we agree with
the Court of Appeals that the amount of
P40,000.00 for private respondent Ramon
171
Miranda and P15,000.00 for the de la Victoria
spouses is justified. The appellate court correctly
held:
The Mecenas case cannot be made the
basis for determining the award for
attorney's fees. The award would naturally
vary or differ in each case. While it is
admitted that plaintiff-appellee Ramon
Miranda who is himself a lawyer,
represented also plaintiffs-appellees Dela
Victoria spouses, we note that separate
testimonial evidence were adduced by
plaintiff-appellee Ramon Miranda (TSN,
February 26, 1982, p. 6) and plaintiffs-
appellees spouses Dela Victoria (TSN,
August 13, 1981, p. 43). Considering the
amount of work and effort put into the case
as indicated by the voluminous transcripts
of stenographic notes, we find no reason
to disturb the award of P40,000.00 for
plaintiff-appellee Ramon Miranda and
P15,000.00 for plaintiffs-appellees Dela
Victoria spouses. 27
The award of exemplary damages should be
increased to P300,000.00 for Ramon Miranda and
P100,000.00 for the de la Victoria spouses in
accordance with our ruling in the Mecenas case:
Exemplary damages are designed by our
civil law to permit the courts to reshape
behaviour that is socially deleterious in its
consequence by creating negative
incentives or deterrents against such
behaviour. In requiring compliance with
the standard of extraordinary diligence, a
standard which is in fact that of the highest
possible degree of diligence, from
common carriers and in creating a
presumption of negligence against them,
the law seeks to compel them to control
their employees, to tame their reckless
instincts and to force them to take
adequate care of human beings and their
property. The Court will take judicial notice
of the dreadful regularity with which
grievous maritime disasters occur in our
waters with massive loss of life. The bulk
of our population is too poor to afford
domestic air transportation. So it is that
notwithstanding the frequent sinking of
passenger vessels in our waters, crowds
of people continue to travel by sea. This
Court is prepared to use the instruments
given to it by the law for securing the ends
of law and public policy. One of those
instruments is the institution of exemplary
damages; one of those ends, of special
importance in an archipelagic state like the
Philippines, is the safe and reliable
carriage of people and goods by sea. 28
WHEREFORE, the decision of the Court of
Appeals is AFFIRMED with modification and
petitioner is ORDERED to pay private respondents
damages as follows:
To private respondent Ramon Miranda:
P23,075.00 for actual damages;
P109,038.96 as compensatory damages
for loss of earning capacity of his wife;
P150,000.00 as compensatory damages
for wrongful death of three (3) victims;
P300,000.00 as moral damages;
P300,000.00 as exemplary damages, all in
the total amount of P882,113.96; and
P40,000.00 as attorney's fees.
To private respondents Spouses Ricardo and
Virginia de la Victoria:
P12,000.00 for actual damages;
P111,456.00 as compensatory damages
for loss of earning capacity;
P50,000.00 as compensatory damages for
wrongful death;
P100,000.00 as moral damages;
P100,000.00 as exemplary damages, all in
the total amount of P373,456.00; and
P15,000.00 as attorney's fees.
Petitioners are further ordered to pay costs of suit.
In the event the Philippine National Oil Company
and/or the PNOC Shipping and Transport
Corporation pay or are required to pay all or a
portion of the amounts adjudged, petitioner
Negros Navigation Co., Inc. shall reimburse either
of them such amount or amounts as either may
have paid, and in the event of failure of Negros
Navigation Co., Inc., to make the necessary
reimbursement, PNOC and/or PNOC/STC shall be
172
entitled to a writ of execution without need of filing
another action.
SO ORDERED.
Regalado and Puno, JJ., concur.
FIRST DIVISION
G.R. No. 141011 July 19, 2001
CITYTRUST BANKING CORPORATION (now
Bank of the Philippine Islands), petitioner,
vs.
ISAGANI C. VILLANUEVA, respondent.
x---------------------------------------------------------x
G.R. No. 141028 July 19, 2001
ISAGANI C. VILLANUEVA, petitioner,
vs.
CITYTRUST BANKING
CORPORATION, respondent.
DAVIDE, JR., C.J.:
In these consolidated cases, the Court is called
upon to determine whether the repeated dishonor
of a check drawn against a well-funded account
but bearing the account number of another
depositor with the same name and surname as the
drawer would entitle the drawer to compensatory
and moral damages and to attorney’s fees.
The antecedent facts are as follows:
Sometime in February 1984, Isagani C. Villanueva
(hereafter VILLANUEVA) opened a savings
account and a current account with Citytrust
Banking Corporation (hereafter the BANK), which
were assigned account numbers 1-033-02337-1
and 33-00977-5, respectively, with an automatic
transfer arrangement.
On 21 May 1986, VILLANUEVA deposited some
money in his savings account with the BANK’s
Legaspi Village Branch in Makati, Metro Manila.
Realizing that he had run out of blank checks,
VILLANUEVA requested a new checkbook from
one of the BANK’s customer service
representatives. He then filled up a checkbook
requisition slip with the obligatory particulars,
except for his current account number which he
could not remember. He expressed his
predicament to a lady customer service
representative of the BANK, who in turn assured
him that she could supply the information from the
BANK’s account records. After signing the
requisition slip, he gave it to her.1
Pia Rempillo, another customer service
representative of the BANK, saw VILLANUEVA’s
checkbook requisition slip. She took it and
proceeded to check the BANK’s checkbook
register which contained all the names and
account numbers of the BANK’s clients who were
issued checkbooks. Upon seeing the name
"Isagani Villanueva -- Account No. 33-00446-3" in
the checkbook register, Rempillo copied the
aforesaid account number on the space intended
for it in VILLANUEVA’s requisition slip.2
On 17 June 1986, VILLANUEVA received from the
BANK his requested checkbook. On the same day,
he immediately signed Check No. 396701 bearing
the amount of P50,000 payable to the order of
Kingly Commodities Traders and Multi Resources,
Inc. (hereafter Kingly Commodities).
VILLANUEVA thereafter delivered the check to
Helen Chu, his investment consultant at Kingly
Commodities, with his express instruction to use
said check in placing a trading order at Kingly
Commodities’ future trading business as soon as
a favorable opportunity presented itself.3
Two days later, or on 19 June 1986, VILLANUEVA
received a call from Helen Chu, informing him that
she had already placed a trading order in his
behalf and delivered the check to Kingly
Commodities. The check was deposited with the
China Banking Corporation. The next day, he
deposited P31,600 in cash to his savings account
to cover the full amount of the check he issued. His
deposits in both accounts totalled P51,304.91.4
However, on 23 June 1986, VILLANUEVA’s
Check No. 396701 was dishonored due to
insufficiency of funds and disparity in the
signature. VILLANUEVA called Kingly
Commodities and explained that there was a
mistake in the dishonor of the check because he
had sufficient funds. Forthwith on the same day,
VILLANUEVA called up the BANK’s Legaspi
Village Branch Operations Manager, Maritess
Gamboa, and inquired about the dishonor of his
well-funded check. Gamboa promised to look into
the matter and instructed VILLANUEVA to advise
his payee, Kingly Commodities, to re-deposit the
check. Gamboa assured VILLANUEVA that the
173
check would be honored after the sufficiency of the
funds was ascertained.5
On 26 June 1986 at about 4:00 p.m.,
VILLANUEVA learned that his check was again
dishonored due to insufficiency of funds and a
stop- payment order he allegedly issued.
Dismayed by the turn of events, VILLANUEVA
called up the BANK and inquired from Gamboa the
reason for the dishonor of his well-funded check
and the alleged stop-payment order which he
never issued. Gamboa promised to investigate the
matter and to call VILLANUEVA in fifteen (15)
minutes.6 In the meantime, she advised
VILLANUEVA to re-deposit the check.
VILLANUEVA then requested Lawrence Chin of
Kingly Commodities to give him until 5:30 p.m. that
same day to make good his P50,000 check. He
then proceeded to the BANK’s Legaspi Village
Branch Office, together with his investment
consultant and his trading partner, to personally
inquire into the matter. They were met by Marilou
Genuino, the BANK’s Branch Manager. There he
complained that his trading order was rejected
because of the dishonor of the check and that
Kingly Commodities threatened to close his
trading account unless his check payment would
be made good before 5:30 p.m. that day. After
making the necessary investigation, Genuino
related to VILLANUEVA that the reason for the
dishonor of the check was that the account number
assigned to his new checkbook was the account
number of another depositor also named "Isagani
Villanueva" but with a different middle initial.7
To resolve the matter, Genuino promised to send
to Kingly Commodities a manager’s check for
P50,000 before 5:30 p.m., the deadline given to
VILLANUEVA. She also personally called Kingly
Commodities and explained the reason for the
dishonor of the check.8
On 30 June 1986, VILLANUEVA sent a letter9 to
the BANK addressed to the President, Jose
Facundo, demanding indemnification for alleged
losses and damages suffered by him as a result of
the dishonor of his well-funded check. He
demanded the amount of P70,000 as
indemnification for actual damages in the form of
lost profits and P2 Million for moral and other
damages.
On 10 July 1986, in answer to VILLANUEVA’s
letter, Gregorio Anonas III, the BANK’s Senior
Vice-President, apologized for the unfortunate
oversight, but reminded VILLANUEVA that the
dishonor of his check was due to his failure to state
his current account number in his requisition slip.
Anonas further stated that as soon as the mistake
was discovered, the BANK promptly sent a
manager’s check to Kingly Commodities before
5:30 p.m. on 26 June 1986 to avoid any damage
the dishonor of the check might have caused.10
Failing to obtain from the BANK a favorable action
on his demand for indemnification, VILLANUEVA
filed on 27 August 1986 a complaint for damages
based on breach of contract and/or quasi-delict
before the Regional Trial Court of Makati City. The
case was docketed as Civil Case No. 14749 and
was raffled to Branch 63 thereof.
VILLANUEVA alleged in his complaint that the
BANK breached its contractual obligation to him as
a depositor because of its repeated dishonor of his
valid and well-funded check. The breach arose
from the BANK’s gross negligence and culpable
recklessness in supplying the wrong account
number. As a consequence, he suffered and
sustained (1) actual damages consisting of loss of
profits in the amount of at least P240,000, for he
was not allowed to trade by Kingly Commodities;
and (2) P2 Million as moral damages because of
the intolerable physical inconvenience, discomfort,
extreme humiliation, indignities, etc., that he had
borne before his peers and colleagues in the firm,
his trading partners, and the officers of Kingly
Commodities. He prayed for an additional award
of P500,000 for exemplary damages, attorney’s
fees, litigation expenses and costs of the suit.11
In its answer, the BANK alleged that VILLANUEVA
suffered no actionable injury, much less damages,
considering his blatant irresponsibility in not
remembering his current account number and in
failing to bring his checkbook re-order slip form on
which his account number was inscribed when he
requested a new set of checks. His negligence in
verifying the account number of the new set of
checks issued to him also contributed to the
dishonor of his check. The BANK claimed that it
acted in good faith when it twice dishonored the
check. It further asserted that VILLANUEVA’s
negligence was the proximate cause of his self-
proclaimed injury; and the alleged losses and
damages could not likewise be deemed the natural
and probable consequences of the BANK’s breach
of obligation, had there been any. Finally, it
claimed that VILLANUEVA acted with malice in
filing the case, and interposed counterclaims of
P500,000 as exemplary damages; P250,000 as
attorney’s fees; and actual damages as may be
determined by the court.12
174
After due proceedings, the trial court rendered on
3 July 1992 a decision13 dismissing the complaint
and the compulsory counterclaim for lack of merit.
To the trial court, the basic issue was whether it
was VILLANUEVA’s or the BANK’s negligence
which was the proximate cause of the former’s
alleged injury. After an evaluation of the respective
allegations and evidence of the parties, the trial
court found that VILLANUEVA’s negligence set
the chain of events which resulted in his alleged
losses and damages. His negligence consisted in
his failure to (a) indicate his current account
number when he filled up his requisition slip for a
new set of checks; (b) remember his account
number; (c) bring the used checkbook to which
was attached the pre-order requisition slip on
which the account number was pre-indicated; (d)
give the requisition slip to the care and custody of
a BANK officer or employee instead of leaving the
requisition slip on top of one of the tables of the
BANK; and (e) verify the account number of the
new set of checks when it was delivered to him.
These omissions directly resulted in the dishonor
of his check drawn from an account bearing the
account number of another BANK client whose
name and surname were similar to his.
VILLANUEVA then must bear the consequent
damages and losses he allegedly suffered.
The trial court conceded, however, that the BANK
was negligent when it failed to supply
VILLANUEVA’s correct account number despite
its promise to do so; but its negligence was merely
contributory, which would have "reduced the
damages recoverable" by VILLANUEVA had the
latter proved his claims for actual, moral and
exemplary damages, and attorney’s fees.
Likewise, the trial court doubted that VILLANUEVA
sustained actual damages in the amount of
P240,000 due to loss of profits as averred in the
complaint considering that his initial claim against
the BANK for actual loss was merely P70,
00014 and the evidence presented in support
thereof was hearsay, unreliable and not the best
evidence.
VILLANUEVA appealed to the Court of Appeals.
The appeal was docketed as CA-G.R. CV No.
40931.
In his appeal, VILLANUEVA maintained that the
BANK was guilty of gross or culpable negligence
amounting to bad faith when its customer service
representative furnished an erroneous account
number. He further contended that the same was
the proximate cause of the repeated dishonor of
his check. He should, therefore, be entitled to an
award of actual, moral and exemplary damages,
including attorney’s fees and costs of the suit.
The Court of Appeals, in its decision of 2 February
1999,15 ruled that when the BANK voluntarily
processed the requisition slip without the requisite
account number being supplied by the applicant, it
in effect took upon itself the obligation to supply
the correct account number. Thus, when the new
checkbook was released to VILLANUEVA on 17
June 1986, the BANK was deemed to have waived
any defect in the requisition slip and estopped from
putting the blame on VILLANUEVA’s failure to
indicate his account number. VILLANUEVA had
every right to assume that everything was in order
in his application for a new checkbook; for, after
all, he was banking with a world class universal
bank. The banking industry is imbued with public
interest and is mandated by law to serve its clients
with extraordinary care and diligence.
The Court of Appeals also considered the BANK’s
voluntary processing of the requisition slip as the
"cause which in the natural and continuous
sequence, unbroken by any efficient intervening
cause, produced the injury and without which the
result would not have occurred."16 However,
although it conceded that the BANK‘s negligence
was not attended with malice and bad faith, it
nonetheless awarded moral damages in the
amount of P100,000. It also awarded attorney’s
fees in the amount of P50,000, since
VILLANUEVA was compelled to incur expenses to
protect his interests by reason of the unjustified act
or omission of the BANK. However, it rejected
VILLANUEVA’s claim for compensatory damages
and affirmed the trial court’s finding thereon.
Upon the denial17 of their respective motions for
reconsideration, both VILLANUEVA and the BANK
appealed to us by way of petition for review.
In its petition, the BANK ascribes to the Court of
Appeals as reversible errors its (1) reversal of the
court a quo’s decision; (2) declaration that the
proximate and efficient cause of the injury
allegedly suffered by VILLANUEVA was the
BANK’s processing of the checkbook and
assigning an erroneous account number, and not
the negligent act of VILLANUEVA in leaving the
checkbook requisition slip on top of one of the
desks with the account number entry blank; and
(3) award of moral damages and attorney’s fees
despite the absence of a finding of bad faith on the
part of the BANK.
In his petition, VILLANUEVA asserts that the Court
of Appeals erred in holding that his actual losses
175
in the amount of P234,059.04 was not sufficiently
proved with reasonable certainty. Had his fully-
funded check not been dishonored twice, his four
trading orders with Kingly Commodities consisting
of two (2) open sell positions on 17 and 18 of June
1986 and two (2) settle buy orders on 26 June
1986 would have earned him profits in the amount
he claimed. He emphatically maintains that the
loss had been satisfactorily proved by the
testimony of Helen Chu, his investment consultant.
Ms. Chu’s testimony was not controverted; hence,
it should have been considered and admitted as
factually true. Considering that his claim for actual
damages has been adequately established and
that the BANK committed gross negligence
amounting to bad faith, his concomitant demand
for exemplary damages should likewise be
awarded.
The issue of whether VILLANUEVA suffered
actual or compensatory damages in the form of
loss of profits is factual. Both the Court of Appeals
and the trial court have ascertained that
VILLANUEVA was unable to prove his demand for
compensatory damages arising from loss. His
evidence thereon was found inadequate,
uncorroborated, speculative, hearsay and not the
best evidence. Basic is the jurisprudential principle
that in determining actual damages, the court
cannot rely on mere assertions, speculations,
conjectures or guesswork but must depend on
competent proof and on the best obtainable
evidence of the actual amount of the loss.18 Actual
damages cannot be presumed but must be duly
proved with reasonable certainty.19
It must also be stressed that the unanimity on the
factual ascertainment on this point by the trial court
and the Court of Appeals bars us from supplanting
their finding and substituting it with our own
assessment. Well-entrenched in our jurisprudence
is the doctrine that the factual determinations of
the lower courts are conclusive and binding upon
appellate courts and hence should not be
disturbed. None of the recognized exceptions to
said principle exists in this case to warrant a
reexamination of such finding. Besides, our
jurisdiction in cases brought before us from the
Court of Appeals is limited to the review of errors
of law.20
Nonetheless, is VILLANUEVA entitled to the moral
damages and attorney’s fees granted by the Court
of Appeals?
Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social
humiliation, and similar injury.21 Although
incapable of pecuniary computation, moral
damages may be recovered if they are the
proximate result of the defendant’s wrongful act or
omission.22 Thus, case law establishes the
requisites for the award of moral damages, viz: (1)
there must be an injury, whether physical, mental
or psychological, clearly sustained by the claimant;
(2) there must be a culpable act or omission
factually established; (3) the wrongful act or
omission of the defendant is the proximate cause
of the injury sustained by the claimant; and (4) the
award of damages is predicated on any of the
cases stated in Article 2219 of the Civil Code.23
It is beyond cavil that VILLANUEVA had sufficient
funds for the check. Had his account number been
correct, the check would not have been
dishonored. Hence, we can say that
VILLANUEVA’s injury arose from the dishonor of
his well-funded check. We have already ruled that
the dishonor of the check does not entitle him to
compensatory damages. But, could the dishonor
result in his alleged "intolerable physical
inconvenience and discomfort, extreme
humiliation, indignities, etc, which he had borne
before his peers, trading partners and officers of
Kingly Commodities?" True, we find that under the
circumstances of this case, VILLANUEVA might
have suffered some form of inconvenience and
discomfort as a result of the dishonor of his check.
However, the same could not have been so grave
or intolerable as he attempts to portray or impress
upon us.
Further, it is clear from the records that the BANK
was able to remedy the caveat of Kingly
Commodities to VILLANUEVA that his trading
account would be closed at 5:30 p.m. on 26 June
1986. The BANK was able to issue a manager’s
check in favor of Kingly Commodities before the
deadline. It was able to likewise explain to Kingly
Commodities the circumstances surrounding the
unfortunate situation. Verily, the alleged
embarrassment or inconvenience caused to
VILLANUEVA as a result of the incident was timely
and adequately contained, corrected, mitigated, if
not entirely eradicated. VILLANUEVA, thus, failed
to support his claim for moral damages. In short,
none of the circumstances mentioned in Article
2219 of the Civil Code exists to sanction the award
for moral damages.
The award of attorney’s fees should likewise be
deleted. The general rule is that attorney’s fees
cannot be recovered as part of damages because
of the policy that no premium should be placed on
the right to litigate. They are not to be awarded
every time a party wins a suit. The power of the
176
court to award attorney’s fees under Article 2208
of the Civil Code demands factual, legal and
equitable justification. Even when a claimant is
compelled to litigate with third persons or to incur
expenses to protect his rights, still attorney’s fees
may not be awarded where there is no sufficient
showing of bad faith in the parties’ persistence of
a case other than an erroneous conviction of the
righteousness of his cause.24
In view of the foregoing discussion, we need not
deliberate on the dispute as to whether it was the
BANK’s or VILLANUEVA’s negligence which was
the proximate cause of the latter’s injury because,
in the first place, he did not sustain any
compensable injury. If any damage had been
suffered at all, it could be equivalent to damnum
absque injuria, i.e., damage without injury or
damage or injury inflicted without injustice, or loss
or damage without violation of a legal right, or a
wrong done to a man for which the law provides
no remedy.25
WHEREFORE, the decision of the Court of
Appeals in CA-G.R. CV No. 40931 is hereby
REVERSED, and the judgment of the Regional
Trial Court of Makati City, Branch 63, in Civil Case
No. 14749 dismissing the complaint and the
counterclaim is hereby REINSTATED.
No costs.
SO ORDERED.
Puno, Kapunan, Pardo, and Ynares-Santiago,
JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-16439 July 20, 1961
ANTONIO GELUZ, petitioner,
vs.
THE HON. COURT OF APPEALS and OSCAR
LAZO, respondents.
Mariano H. de Joya for petitioner.
A.P. Salvador for respondents.
REYES, J.B.L., J.:
This petition for certiorari brings up for review
question whether the husband of a woman, who
voluntarily procured her abortion, could recover
damages from physician who caused the same.
The litigation was commenced in the Court of First
Instance of Manila by respondent Oscar Lazo, the
of Nita Villanueva, against petitioner Antonio
Geluz, a physician. Convinced of the merits of the
complaint upon the evidence adduced, the trial
court rendered judgment favor of plaintiff Lazo and
against defendant Geluz, ordering the latter to pay
P3,000.00 as damages, P700.00 attorney's fees
and the costs of the suit. On appeal, Court of
Appeals, in a special division of five, sustained the
award by a majority vote of three justices as
against two, who rendered a separate dissenting
opinion.
The facts are set forth in the majority opinion as
follows:
Nita Villanueva came to know the
defendant (Antonio Geluz) for the first time
in 1948 — through her aunt Paula Yambot.
In 1950 she became pregnant by her
present husband before they were legally
married. Desiring to conceal her
pregnancy from her parent, and acting on
the advice of her aunt, she had herself
aborted by the defendant. After her
marriage with the plaintiff, she again
became pregnant. As she was then
employed in the Commission on Elections
and her pregnancy proved to be
inconvenient, she had herself aborted
again by the defendant in October 1953.
Less than two years later, she again
became pregnant. On February 21, 1955,
accompanied by her sister Purificacion
and the latter's daughter Lucida, she again
repaired to the defendant's clinic on
Carriedo and P. Gomez streets in Manila,
where the three met the defendant and his
wife. Nita was again aborted, of a two-
month old foetus, in consideration of the
sum of fifty pesos, Philippine currency.
The plaintiff was at this time in the province
of Cagayan, campaigning for his election
to the provincial board; he did not know of,
nor gave his consent, to the abortion.
It is the third and last abortion that constitutes
plaintiff's basis in filing this action and award of
damages. Upon application of the defendant
Geluz we granted certiorari.
The Court of Appeals and the trial court predicated
the award of damages in the sum of P3,000.06
upon the provisions of the initial paragraph of
177
Article 2206 of the Civil Code of the Philippines.
This we believe to be error, for the said article, in
fixing a minimum award of P3,000.00 for the death
of a person, does not cover the case of an unborn
foetus that is not endowed with personality. Under
the system of our Civil Code, "la criatura abortiva
no alcanza la categoria de persona natural y en
consscuencia es un ser no nacido a la vida del
Derecho" (Casso-Cervera, "Diccionario de
Derecho Privado", Vol. 1, p. 49), being incapable
of having rights and obligations.
Since an action for pecuniary damages on account
of personal injury or death pertains primarily to the
one injured, it is easy to see that if no action for
such damages could be instituted on behalf of the
unborn child on account of the injuries it received,
no such right of action could derivatively accrue to
its parents or heirs. In fact, even if a cause of
action did accrue on behalf of the unborn child, the
same was extinguished by its pre-natal death,
since no transmission to anyone can take place
from on that lacked juridical personality (or juridical
capacity as distinguished from capacity to act). It
is no answer to invoke the provisional personality
of a conceived child (conceptus pro nato habetur)
under Article 40 of the Civil Code, because that
same article expressly limits such provisional
personality by imposing the condition that the child
should be subsequently born alive: "provided it be
born later with the condition specified in the
following article". In the present case, there is no
dispute that the child was dead when separated
from its mother's womb.
The prevailing American jurisprudence is to the
same effect; and it is generally held that recovery
can not had for the death of an unborn child
(Stafford vs. Roadway Transit Co., 70 F. Supp.
555; Dietrich vs. Northampton, 52 Am. Rep. 242;
and numerous cases collated in the editorial note,
10 ALR, (2d) 639).
This is not to say that the parents are not entitled
to collect any damages at all. But such damages
must be those inflicted directly upon them, as
distinguished from the injury or violation of the
rights of the deceased, his right to life and physical
integrity. Because the parents can not expect
either help, support or services from an unborn
child, they would normally be limited to moral
damages for the illegal arrest of the normal
development of the spes hominis that was the
foetus, i.e., on account of distress and anguish
attendant to its loss, and the disappointment of
their parental expectations (Civ. Code Art. 2217),
as well as to exemplary damages, if the
circumstances should warrant them (Art. 2230).
But in the case before us, both the trial court and
the Court of Appeals have not found any basis for
an award of moral damages, evidently because
the appellee's indifference to the previous
abortions of his wife, also caused by the appellant
herein, clearly indicates that he was unconcerned
with the frustration of his parental hopes and
affections. The lower court expressly found, and
the majority opinion of the Court of Appeals did not
contradict it, that the appellee was aware of the
second abortion; and the probabilities are that he
was likewise aware of the first. Yet despite the
suspicious repetition of the event, he appeared to
have taken no steps to investigate or pinpoint the
causes thereof, and secure the punishment of the
responsible practitioner. Even after learning of the
third abortion, the appellee does not seem to have
taken interest in the administrative and criminal
cases against the appellant. His only concern
appears to have been directed at obtaining from
the doctor a large money payment, since he sued
for P50,000.00 damages and P3,000.00 attorney's
fees, an "indemnity" claim that, under the
circumstances of record, was clearly exaggerated.
The dissenting Justices of the Court of Appeals
have aptly remarked that:
It seems to us that the normal reaction of
a husband who righteously feels outraged
by the abortion which his wife has
deliberately sought at the hands of a
physician would be highminded rather
than mercenary; and that his primary
concern would be to see to it that the
medical profession was purged of an
unworthy member rather than turn his
wife's indiscretion to personal profit, and
with that idea in mind to press either the
administrative or the criminal cases he had
filed, or both, instead of abandoning them
in favor of a civil action for damages of
which not only he, but also his wife, would
be the beneficiaries.
It is unquestionable that the appellant's act in
provoking the abortion of appellee's wife, without
medical necessity to warrant it, was a criminal and
morally reprehensible act, that can not be too
severely condemned; and the consent of the
woman or that of her husband does not excuse it.
But the immorality or illegality of the act does not
justify an award of damage that, under the
circumstances on record, have no factual or legal
basis.
The decision appealed from is reversed, and the
complaint ordered dismissed. Without costs.
178
Let a copy of this decision be furnished to the
Department of Justice and the Board of Medical
Examiners for their information and such
investigation and action against the appellee
Antonio Geluz as the facts may warrant.
Bengzon, C.J., Padilla, Labrador, Barrera,
Paredes, Dizon and Natividad, JJ., concur.
Concepcion, J., took no part.
De Leon, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-8721 May 23, 1957
TRANQUILINO CACHERO, plaintiff-appellant,
vs.
MANILA YELLOW TAXICAB CO.,
INC., defendant-appellant.
Bernardino Guerrero and J. G. Madarang for
plaintiff-appellant.
Castaño and Ampil for the defendant-appellant.
FELIX, J.:
There is no dispute as to the following facts: on
December 13, 1952, Atty. Tranquilino F. Cachero
boarded a Yellow Taxicab, with plate No. 2159-52
driven by Gregorio Mira Abinion and owned by the
Manila Yellow Taxicab Co., Inc. On passing
Oroquieta between Doroteo Jose and Lope de
Vega streets, Gregorio Mira Abinion bumped said
taxicab against a Meralco post, No. 1-4/387, with
the result that the cab was badly smashed and the
plaintiff fell out of the vehicle to the ground,
suffering thereby physical injuries, slight in nature.
The chauffeur was subsequently prosecuted by
the City Fiscal and on February 26, 1963, upon his
plea of guilty the Municipal Court of Manila
sentenced him to suffer 1 month and 1 day
of arresto mayor, and to pay the costs. On
December 17, 1952, Tranquilino F. Cachero
addressed a letter to the Manila Yellow Taxicab
Co., Inc., which was followed by another of
January 6, 1953, which reads as follows:
MANILA, January 6, 1953
The MANILA YELLOW TAXICAB CO.,
INC.
1338 Arlegui, Manila
Dear Sirs:
As you have been already advised by the
letter dated December 17, 1952, on
December 13, 1952, while I was a
passenger of your taxicab bearing plate
No. 2159 and driven by your chauffeur
Gregorio Mira and through his negligence
and the bad condition of the said car, he
bumped the same against the pavement
on the street (Oroquieta — between
Doroteo Jose and Lope de Vega streets,
Manila) and hit the Meralco post on said
street, resulting in the smashing of the said
taxicab, and as a result thereof I was
gravely injured and suffered and is still
suffering physical, mental and moral
damages and not being able to resume my
daily calling.
For the said damages, I hereby make a
demand for the payment of the sum of
P79,245.65, covering expenses for
transportation to the hospital for medical
treatment, medicines, doctors bills, actual
monetary loss, moral, compensatory and
exemplary damages, etc., within 5 days
from date of receipt hereof.
I trust to hear from you on the matter within
the period of 5 days above specified.
Truly yours,
(Sgd.) TRANQUILINO F. CACHERO
2256 Int. B, Misericordia St.,
Sta. Cruz, Manila
(Exhibit K)
The Taxicab Co. to avoid expenses and time of
litigation offered to settle the case amicably with
plaintiff but the latter only agreed to reduce his
demand to the sum of P72,050.20 as his only basis
for settlement which, of course, was not accepted
by said company. So plaintiff instituted this action
on February 2, 1953, in the Court of First Instance
of Manila, praying in the complaint that the
defendant be condemned to pay him:
(a) The sum of P72,050.20, the total sum
of the itemized losses and/or damages
under paragraph 7 of the complaint, with
179
 legal interest thereon from the date of the
filing of the complaint;
(b) The sum of P5,000 as attorney's fee;
and the costs of the suit; and
Plaintiff further respectfully prays for such
other and further reliefs as the facts and
the law pertaining to the case may warrant.
The defendant answered the complaint setting
forth affirmative defenses and a counterclaim for
P930 as damages and praying for the dismissal of
plaintiff's action. After hearing the Court rendered
decision only July 20, 1954, the dispositive part of
which is as follows:
IN VIEW OF THE FOREGOING, the Court
hereby renders judgment in favor of the
plaintiff and against the defendant,
sentencing the latter to pay the former the
following: (1) For medicine, doctor's fees
for services rendered and transportation,
P700; (2) professional fee as attorney for
the defendant in Criminal Case No. 364,
"People vs. Manolo Maddela et al." of the
Court of First Instance of Nueva Vizcaya,
P3,000; (3) professional fees as attorney
for the defendant in Civil Case No. 23891
of the Municipal Court of Manila, "Virginia
Tangulan vs. Leonel da Silva," and for the
taking of the deposition of Gabina
Angrepan in a case against the Philippine
National Bank, P200; and(4) moral
damages in the amount of P2,000.
Defendant's counterclaim is hereby dismissed.
Defendant shall also pay the costs."
From this decision both parties appealed to Us,
plaintiff limiting his appeal to the part of the
decision which refers to the moral damages
awarded to him which he considered inadequate,
and to the failure of said judgment to grant the
attorney's fees asked for in the prayer of his
complaint. Defendant in turn alleges that the trial
Court erred in awarding to the plaintiff the
following:
(1) P700 — for medicine, doctor's fees and
transportation expenses;
(2) P3,000 — as supposedly unearned full
professional fees as attorney for the
defendant in Criminal Case No. 364,
"People vs. Manolo Maddela et al.";
(3) P200 — as supposedly unearned
professional fees as attorney for the
defendant in Civil Case No. 23891 of the
Manila Municipal Court, "Virginia
Tangulan vs. Leonel de Silva", and for
failure to take the deposition of a certain
Gabina Angrepan in an unnamed case;
and
(4) P2,000 — as moral damages,
amounting to the grand total of P5,900,
these amounts being very much greater
than what plaintiff deserves.
In connection with his appeal, plaintiff calls
attention to the testimonies of Dr. Modesto S.
Purisima and of Dr. Francisco Aguilar, a member
of the staff of the National Orthopedic Hospital,
which he considers necessary as a basis for
ascertaining not only the physical sufferings
undergone by him, but also for determining the
adequate compensation for moral damages that
he should be awarded by reason of said accident.
The exact nature of plaintiff's injuries, their degree
of seriousness and the period of his involuntary
disability can be determined by the medical
certificate (Exhibit D) issued by the National
Orthopedic Hospital on December 16, 1952, and
the testimonies of Dr. Francisco Aguilar, physician
in said hospital, and of Dr. Modesto Purisima, a
private practitioner. The medical certificate (Exhibit
D) lists: (a) a subluxation of the right shoulder joint;
(b) a contusion on the right chest; and (c) a
"suspicious fracture" of the upper end of the right
humerus. Dr. Aguilar who issued the medical
certificate admitted, however, with regard to the
"suspicious fracture", that in his opinion with (the
aid of) the x-ray there was no fracture. According
to this doctor plaintiff went to the National
0rthopedic Hospital at least six times during the
period from December 16, 1952, to April 7, 1953;
that he strapped plaintiffs body (see Exhibit E),
which strap was not removed until after a period of
six weeks had elapsed Dr. Modesto Purisima, a
private practitioner, testified that
he advised and treated plaintiff from, December
14, 1952, to the end of March (1953). Plaintiff was
never hospitalized for treatment of the injuries he
received in said accident.
Counsel for the defendant delves quite extensively
on these injuries. He says in his brief the following:
Just what is a subluxation? Luxation is
another term for dislocation (Dorland,
W.A.N., The American Illustrated Medical
Dictionary (13th ed.), p. 652), and hence,
180
a sublaxation is an incomplete or
partial dislocation (Ibid., p. 1115). While a
dislocation is the displacement of a bone
or bones from its or their normal setting
(and, therefore, applicable and occurs only
to joints and not to rigid or non-movable
parts of the skeletal system) (Ibid., p. 358;
Christopher, F., A Textbook of Surgery
(5th ed.), p. 342), it should be
distinguished from a fracture which is a
break or rupture in a bone or cartilage,
usually due to external violence
(Christopher, F., A Textbook of Surgery
(5th Ed.) p. 194; Dorland, W.A.N., The
American Illustrated Medical Dictionary
(13th ed.), P.459). Because,
unlike fracture which may be partial (a
crack in the bone) or total (a complete
break in the bone), there can be no half-
way situations with regard to dislocations
of the shoulder joint (the head or ball of the
humerus — the humerus is the bone from
the elbow to the shoulder) must be either
inside the socket of the scapula or
shoulder blade (in which case there is no
dislocation) or out of the latter (in which
event there is a dislocation), to denote a
condition where due to external violence,
the muscles and ligaments connecting the
humerus to the scapula have subjected to
strain intense enough to produce
temporary distention or lessening of their
tautness and consequently resulting in the
loosening or wrenching of the ball of the
humerus from its snug fit in the socket of
the scapula, by using the terms
subluxation or partial dislocation(as used
in the medical certificate), is to fall into a
misnomer — a term often used by
"chiropractors" and by those who would
want to sound impressive, but generally
unfavored by the medical profession. To
describe the above condition more aptly,
the medical profession usually employs
the expression luxatio imperfecta, or, in
simple language, a sprain (Dorland,
W.A.N., The American Illustrated Medical
Dictionary (13th ed.), p. 652). The
condition we have described is a
paraphrase of the definition of a sprain.
Plaintiff suffered this very injury (a
sprained or wrenched shoulder joint) and
a cursory scrutiny of his x-ray plates
(Exhibits A and B) by a qualified orthopedic
surgeon or by a layman with a picture or x-
ray plate of a normal shoulder joint (found
in any standard textbook on human
anatomy; the one we used was Schemer,
J.P., Morris' Human Anatomy (10 ed., p.
194) for comparison will bear out our claim.
Treatment for a sprain is by the use of
adhesive or elastic bandage, elevation of
the joint, heat, effleurage and later
massage (Christopher, F., A Textbook of
Surgery (5th ed., p. 116). The treatment
given to the plaintiff was just exactly that
Dr. Aguilar bandaged (strapped) plaintiff's
right shoulder and chest (t.s.n., p. 31) in an
elevated position (with the forearm
horizontal to the chest (see photograph,
Exhibit E), and certain vitamins were
prescribed for him (t.s.n., p. 131). He also
underwent massage for some time by Drs.
Aguilar and Purisima. The medicines and
appurtenances to treatment purchased by
plaintiff from the Orthopedic Hospital,
Botica Boie and Metro Drug Store were, by
his own admission, adhesive plaster,
bandage, gauze, oil and "tintura arnica"
(t.s.n., p. 3 — continuation of transcript ),
and Dr. Purisima also prescribed
"Numotizin", a beat generating ointment
(t.s.n., p. 23), all of which are indicated for
a sprain, and by their nature, can cure
nothing more serious than a sprain
anyway. Fractures and true dislocations
cannot be cured by the kind of treatment
and medicines which plaintiff received. A
true dislocation, for instance, is treated by
means of reduction through traction of the
arm until the humeral head returns to the
proper position in the scapular socket
(pulling the arm at a 60 degree angle and
guiding the ball of the humerus into proper
position, in its socket) while the patient is
under deep anaesthesia, and then,
completely immobilizing the part until the
injured capsule has healed (Christopher,
F., A Textbook of Surgery, pp. 343 and
344). No evidence was submitted that
plaintiff ever received the latter kind of
treatment. Dr. Purisima even declared that
after the plaintiff's first visit to the
Orthopedic Hospital the latter informed
him that there was no fracture or
dislocation (t.s.n., p. 26). Dr. Purisima's
statement is the truth of the matter as we
have already explained — joints of the
shoulder being only subject to total
dislocation (due to their anatomical
design), not to partial ones, and any injury
approximating dislocation but not
completely, it being classified as mere
sprains, slight or bad.
181
 The second and last injury plaintiff
sustained was a contusion. What is a
contusion? It is just a high flown
expression for a bruise or the act of
bruising (Dorland, W.A.N., The American
Illustrated Medical Dictionary (13th ed. p.
290). No further discussion need be made
on this particular injury since the nature of
a bruise is of common knowledge (it's a bit
uncomfortable but not disabling unless it
occurs on movable parts like the fingers or
elbow which is not the case, herein having
occurred in the right chest) and the kind of
medical treatment or help it is also well
known. (pp. 10-14, defendant-appellant's
brief).
The trial Judge undoubtedly did not give much
value to the testimonies of the doctors when in the
statement of facts made in his decision he referred
to the physical injuries received by the plaintiff as
slight in nature and the latter is estopped from
discussing the same in order to make them appear
as serious, because in the statement of facts made
in his brief as appellant, he says the following:
The facts of the case as found by the lower
court in its decision, with the permission of
this Honorable Court, we respectfully
quote them hereunder as
our STATEMENT OF FACTS for the
purpose of this appeal.
Before entering into a discussion of the merits of
plaintiff's appeal, We will say a few words as to the
nature of the action on which his demand for
damages is predicated.
The nature of an action as in contract or in
tort is determined from the essential
elements of the complaint, taken as a
whole, in the case of doubt a construction
to sustain the action being given to it.
While the prayer for relief or measure of
damages sought does not necessarily
determine the character of the action, it
may be material in the determination of the
question and therefore entitled to
consideration and in case of doubt will
open determine character of the action
and indeed there are actions whose
character is necessarily determined
thereby. (1 C.J.S. 1100)
A mere perusal of plaintiff complaint will show that
his action against the defendant is predicated on
an alleged breach of contract of carriage, i.e., the
failure of the defendant to bring him "safely and
without mishaps" to his destination, and it is to be
noted that the chauffeur of defendant's taxicab that
plaintiff used when he received the injuries
involved herein, Gregorio Mira, has not even been
made a party defendant to this case.
Considering, therefore, the nature of plaintiff's
action in this case, is he entitled to compensation
for moral damages? Article 2219 of the Civil Code
says the following:
ART. 2219. Moral damages may be
recovered in the following and analogous
cases:
(1) A criminal offense resulting in physical
injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other
lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of
defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles
21, 26, 27, 28, 29, 30, 32, 34 and 35.
xxx xxx xxx
Of the cases enumerated in the just quoted Article
2219 only the first two may have any bearing on
the case at bar. We find, however, with regard to
the first that the defendant herein has not
committed in connection with this case any
"criminal offense resulting in physical injuries". The
one that committed the offense against the plaintiff
is Gregorio Mira, and that is why he has been
already prosecuted and punished therefor.
Although (a) owners and managers of an
establishment or enterprise are responsible for
damages caused by their employees in the service
of the branches in which the latter are employed or
on the occasion of their functions; (b) employers
are likewise liable for damages caused by their
182
employees and household helpers acting within
the scope of their assigned task (Article 2180 of
the Civil Code); and (c) employers and
corporations engaged in any kind of industry are
subsidiarily civilly liable for felonies committed by
their employees in the discharge of their duties
(Art. 103, Revised Penal Code), plaintiff herein
does not maintain this action under the provisions
of any of the articles of the codes just mentioned
and against all the persons who might be liable for
the damages caused, but as a result of an
admitted breach of contract of carriage and
against the defendant employer alone. We,
therefore, hold that the case at bar does not come
within the exception of paragraph 1, Article 2219
of the Civil Code.
The present complaint is not based either on a
"quasi delict causing physical injuries" (Art. 2219
par. 2, of the Civil Code). From the report of the
Code Commission on the new Civil Code We copy
the following:
A question of nomenclature confronted the
Commission. After a careful deliberation, it
was agreed to use the term "quasi-delict"
for those obligations which do not arise
from law, contracts quasi-contracts or
criminal offenses. They are known in
Spanish legal treatises as "culpa
aquiliana", "culpa-extra-contractual" or
"cuasi-delitos". The phrase "culpa-extra-
contractual" or its translation "extra-
contractual fault" was eliminated because
it did not exclude quasi-contractual or
penal obligations. "Aquilian fault" might
have been selected, but it was thought
inadvisable to refer to so ancient a law as
the "Lex Aquilia". So "quasi-delicts" was
chosen, which more nearly corresponds to
the Roman Law classification of
obligations, and is in harmony with the
nature of this kind of liability.
The Commission also thought of the
possibility of adopting the word "tort" from
Anglo-American Law. But "tort" under that
system is much broader than the Spanish-
Philippine concept of obligations arising
from non-contractual negligence." "Tort" in
Anglo-American jurisprudence includes
not only negligence, but also intentional
criminal acts, such as assault and battery,
false imprisonment and deceit. In the
general plan of the Philippine legal system,
intentional and malicious are governed by
the Penal Code, although certain
exceptions are made in the Project.
(Report of the Code Commission, pp. 161-
162).
In the case of Cangco vs. Manila Railroad, 38 Phil.
768, We established the distinction between
obligation derived from negligence and obligation
as a result of a breach of a contract. Thus, We
said:
It is important to note that the foundation of
the legal liability of the defendant is the
contract of carriage, and that the obligation
to respond for the damage which plaintiff
has suffered arises, if at all, from the
breach of that contract by reason of the
failure of defendant to exercise due care in
its performance. That is to say, its liability
is direct and immediate, differing
essentially in the legal view point from that
presumptive responsibility for the
negligence of its servants, imposed by
Article 1903 of the Civil Code (Art. 2180 of
the new), which can be rebutted by proof
of the exercise of due care in their
selection or supervision. Article 1903 is not
applicable to obligation arising EX
CONTRACTU, but only to extra-
contractual obligations or — to use the
technical form of expression, that article,
relates only to CULPA AQUILIANA and
not to CULPA CONTRACTUAL.
The decisions in the cases of Castro vs. Acro
Taxicab (82 Phil., 359, 46 Off. Gaz., Na. 5, p.
2023); Lilius et al. vs. Manila Railroad, (59 Phil.
758) and others, wherein moral damages, are
awarded to the plaintiffs, are not applicable to the
case at bar because said decisions were rendered
before the effectivity of the new Civil Code (August
30, 1950) and for the further reason that the
complaints filed therein were based on different
causes of action.
In view of the foregoing the sum of P2,000
awarded as moral damages by the trial Court has
to be eliminated, for under the law it is not a
compensation awardable in a case like the one at
bar.
As to plaintiff's demand for P5,000 as attorney's
fees, the Civil Code provides the following:
ART, 2208. In the absence of stipulation,
attorney's fees and expenses of litigation,
other than judicial costs, cannot be
recovered, except:
183
 (1) When exemplary damages are
awarded;
(2) When the defendant's act or omission
has compelled the plaintiff to litigate with
third persons or to incur expenses to
protect his interest;
(3) In criminal cases of malicious
prosecution against the plaintiff;
(4) In case of a clearly unfounded civil
action or proceeding against the plaintiff;
(5) Where the defendant acted in gross
and evident had faith in refusing to satisfy
the plaintiff's plainly valid, just and
demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of
household helpers, laborers and skilled
workers;
(8) in actions for indemnity under
workmen's compensation and employers
liability laws;
(9) In a separate civil action to recover civil
liability arising from a crime;
(10) When at least double judicial costs are
awarded;
(11) In any other case where the court
deems it just and equitable that attorney's
fees and expenses of litigation should be
recovered.
In all cases, the attorney's fees and expenses of
litigation must be reasonable.
The present case does not come under any of
exceptions enumerated in the preceding article,
specially of paragraph 2 thereof, because
defendant's failure to meet its responsibility was
not the plaintiff to litigate or to incur expenses to
protect his interests. The present action was
instituted because plaintiff an exorbitant amount
for damages (P60,000) and naturally the
defendant did not and could not yield to such
demand. This is neither a case that comes under
paragraph 11 of Article 2208 because the Lower
Court did not deem it just and equitable to award
any amount for attorney's fees. As We agree with
the trial Judge on this point, We cannot declare
that he erred for not awarding to plaintiff any such
fees in this case.
Coming now to the appeal of the defendant, the
Court, after due consideration of the evidence
appearing on record:
(1) Approves the award of P700 for medicine,
doctors' fees and transportation expenses;
(2) Reduces the award of P3,000 as attorney's
fees to the sum of P2,000, as Manolo Maddela,
defendant in Criminal Case No. 364 of the Court of
First Instance of Nueva Vizcaya testified that he
has already paid to plaintiff part of the latter's fees
of P3,000, the amount of which was not disclosed,
though it was incumbent upon the plaintiff to
establish how much he had been paid of said fees;
(3) Approves the award of P200 as unearned
professional fees as attorney for the defendant in
Civil Case No. 238191 of the Municipal Court of
Manila whom plaintiff was unable to represent, and
for the latter's failure to take the deposition of one
Agripina Angrepan due to the automobile accident
referred to in this case.
Before closing this decision We deem it
convenient to quote the following passage of
defendant's brief as appellant:
Realizing its obligation under its contract of
carriage with the plaintiff, and because the
facts of the case, as have been shown,
mark it as more proper for the Municipal
Court only, the defendant, to avoid the
expense and time of litigation, offered to
settle the case amicably with plaintiff, but
the latter refused and insisted on his
demand for P72,050.20 (Exhibit K) as the
only basis for settlement, thus adding a
clearly petty case to the already
overflowing desk of the Honorable
Members of this Court.
We admire and respect at all times a man
for standing up and fighting for his rights,
and when said right consists in injuries
sustained due to a breach of a contract of
carriage with us, sympathy and
understanding are added thereto. But
when a person starts demanding
P72,050.20 for a solitary bruise and
sprain, injuries for which the trial court,
even at its generous although erroneous
best, could only grant P5,900, then respect
and sympathy give way to something else.
It is time to fight, for, in our humble opinion,
184
 there is nothing more loathsome nor truly
worthy of condemnation than one who
uses his injuries for other purposes than
just rectification. If plaintiff's claim is
granted, it would be a blessing, not a
misfortune, to be injured. (p. 34-35)
This case was instituted by a lawyer who, as an
officer of the courts, should be the first in helping
Us in the administration of justice, and after going
over the record of this case, we do not hesitate to
say that the demand of P72,050.20 for a
subluxation of the right humerus bone and an
insignificant contusion in the chest, has not even
the semblance of reasonableness. As a matter of
fact, Dr. Aguilar himself said that the x-ray plates
(Exhibits A, Band C) " did not show anything
significant except that it shows a slight subluxation
of the right shoulder, and that there is a suspicious
fracture", which ultimately he admitted not to exist.
The plaintiff himself must have felt embarrassed
by his own attitude when after receiving
defendant's brief as appellant, he makes in his
brief as appellee the categorical statement that he
DOES NOT NOW INSIST NOR PRETEND IN THE
LEAST to Collect from the defendant all the
damages he had claimed in his complaint, but
instead he is submitting his case to the sound
discretion of the Honorable Court for the award of
a reasonable and equitable damages allowable by
law, to compensate the plaintiff of the suffering and
losses he had undergone and incurred of the
accident oftentimes mentioned in this brief in
which plaintiff was injured" (p. 17-18).This
acknowledgment comes too late, for plaintiff has
already deprived the Court of Appeals of the
occasion to exercise its appellate jurisdiction over
this case which he recklessly dumped to this
Court. We certainly cannot look with at favor at his
attitude of plaintiff.
WHEREFORE, the decision appealed from is
hereby modified by reducing the amount awarded
as professional fees from P3,000 to P2,000 and by
eliminating the moral damages of P2,000 awarded
by the Lower Court to the plaintiff. Said decision is
in all other respects affirmed, without
pronouncement as to costs. It is so ordered.
Bengzon, Padilla, Montemayor, Reyes, A.,
Bautista Angelo, Labrador, Concepcion, Reyes,
J.B.L. and Endencia, JJ.,concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-10605 June 30, 1958
PRECILLANO NECESITO, ETC., plaintiff-
appellant,
vs.
NATIVIDAD PARAS, ET AL., defendants-
appellees.
x---------------------------------------------------------x
G.R. No. L-10606 June 30, 1958
GERMAN NECESITO, ET AL., plaintiffs-
appellants,
vs.
NATIVIDAD PARAS, ET AL., defendants-
appellees.
Tomas Besa and Federico Agrava for appellants.
Jose W. Diokno for appellees.
REYES, J. B. L., J.:
These cases involve ex contractu against the
owners and operators of the common carrier
known as Philippine Rabbit Bus Lines, filed by one
passenger, and the heirs of another, who injured
as a result of the fall into a river of the vehicle in
which they were riding.
In the morning of January 28, 1964, Severina
Garces and her one-year old son, Precillano
Necesito, carrying vegetables, boarded passenger
auto truck or bus No. 199 of the Philippine Rabbit
Bus Lines at Agno, Pangasinan. The passenger
truck, driven by Francisco Bandonell, then
proceeded on its regular run from Agno to Manila.
After passing Mangatarem, Pangasinan truck No.
199 entered a wooden bridge, but the front wheels
swerved to the right; the driver lost control, and
after wrecking the bridge's wooden rails, the truck
fell on its right side into a creek where water was
breast deep. The mother, Severina Garces, was
drowned; the son, Precillano Necesito, was
injured, suffering abrasions and fracture of the left
femur. He was brought to the Provincial Hospital
at Dagupan, where the fracture was set but with
fragments one centimeter out of line. The money,
wrist watch and cargo of vegetables were lost.
185
Two actions for damages and attorney's fees
totalling over P85,000 having been filed in the
Court of First Instance of Tarlac (Cases Nos. 908
and 909) against the carrier, the latter pleaded that
the accident was due to "engine or mechanical
trouble" independent or beyond the control of the
defendants or of the driver Bandonell.
After joint trial, the Court of First Instance found
that the bus was proceeding slowly due to the bad
condition of the road; that the accident was caused
by the fracture of the right steering knuckle, which
was defective in that its center or core was not
compact but "bubbled and cellulous", a condition
that could not be known or ascertained by the
carrier despite the fact that regular thirty-day
inspections were made of the steering knuckle,
since the steel exterior was smooth and shiny to
the depth of 3/16 of an inch all around; that the
knuckles are designed and manufactured for
heavy duty and may last up to ten years; that the
knuckle of bus No. 199 that broke on January 28,
1954, was last inspected on January 5, 1954, and
was due to be inspected again on February 5th.
Hence, the trial court, holding that the accident
was exclusively due to fortuitous event, dismissed
both actions. Plaintiffs appealed directly to this
Court in view of the amount in controversy.
We are inclined to agree with the trial court that it
is not likely that bus No. 199 of the Philippine
Rabbit Lines was driven over the deeply rutted
road leading to the bridge at a speed of 50 miles
per hour, as testified for the plaintiffs. Such
conduct on the part of the driver would have
provoked instant and vehement protest on the part
of the passengers because of the attendant
discomfort, and there is no trace of any such
complaint in the records. We are thus forced to
assume that the proximate cause of the accident
was the reduced strength of the steering knuckle
of the vehicle caused by defects in casting it. While
appellants hint that the broken knuckle exhibited in
court was not the real fitting attached to the truck
at the time of the accident, the records they
registered no objection on that ground at the trial
below. The issue is thus reduced to the question
whether or not the carrier is liable for the
manufacturing defect of the steering knuckle, and
whether the evidence discloses that in regard
thereto the carrier exercised the diligence required
by law (Art. 1755, new Civil Code).
ART. 1755. A common carrier is bound to
carry the passengers safely as far as
human care and foresight can provide,
using the utmost diligence of very cautious
persons, with a due regard for the all the
circumstances.
It is clear that the carrier is not an insurer of the
passengers' safety. His liability rests upon
negligence, his failure to exercise the "utmost"
degree of diligence that the law requires, and by
Art. 1756, in case of a passenger's death or injury
the carrier bears the burden of satisfying the court
that he has duly discharged the duty of prudence
required. In the American law, where the carrier is
held to the same degree of diligence as under the
new Civil Code, the rule on the liability of carriers
for defects of equipment is thus expressed: "The
preponderance of authority is in favor of the
doctrine that a passenger is entitled to recover
damages from a carrier for an injury resulting from
a defect in an appliance purchased from a
manufacturer, whenever it appears that the defect
would have been discovered by the carrier if it had
exercised the degree of care which under the
circumstances was incumbent upon it, with regard
to inspection and application of the necessary
tests. For the purposes of this doctrine, the
manufacturer is considered as being in law the
agent or servant of the carrier, as far as regards
the work of constructing the appliance. According
to this theory, the good repute of the manufacturer
will not relieve the carrier from liability" (10 Am. Jur.
205, s, 1324; see also Pennsylvania R. Co. vs.
Roy, 102 U. S. 451; 20 L. Ed. 141; Southern R. Co.
vs. Hussey, 74 ALR 1172; 42 Fed. 2d 70; and Ed
Note, 29 ALR 788; Ann. Cas. 1916E 929).
The rationale of the carrier's liability is the fact that
the passenger has neither choice nor control over
the carrier in the selection and use of the
equipment and appliances in use by the carrier.
Having no privity whatever with the manufacturer
or vendor of the defective equipment, the
passenger has no remedy against him, while the
carrier usually has. It is but logical, therefore, that
the carrier, while not in insurer of the safety of his
passengers, should nevertheless be held to
answer for the flaws of his equipment if such flaws
were at all discoverable. Thus Hannen, J.,
in Francis vs. Cockrell, LR 5 Q. B. 184, said:
In the ordinary course of things, the
passenger does not know whether the
carrier has himself manufactured the
means of carriage, or contracted with
someone else for its manufacture. If the
carrier has contracted with someone else
the passenger does not usually know who
that person is, and in no case has he any
share in the selection. The liability of the
manufacturer must depend on the terms of
the contract between him and the carrier,
of which the passenger has no knowledge,
and over which he can have no control,
while the carrier can introduce what
186
 stipulations and take what securities he
may think proper. For injury resulting to the
carrier himself by the manufacturer's want
of care, the carrier has a remedy against
the manufacturer; but the passenger has
no remedy against the manufacturer for
damage arising from a mere breach of
contract with the carrier . . . . Unless,
therefore, the presumed intention of the
parties be that the passenger should, in
the event of his being injured by the breach
of the manufacturer's contract, of which he
has no knowledge, be without remedy, the
only way in which effect can be given to a
different intention is by supposing that the
carrier is to be responsible to the
passenger, and to look for his indemnity to
the person whom he selected and whose
breach of contract has caused the
mischief. (29 ALR 789)
And in the leading case of Morgan vs.
Chesapeake & O. R. Co. 15 LRA (NS) 790, 16
Ann. Cas. 608, the Court, in holding the carrier
responsible for damages caused by the fracture of
a car axle, due to a "sand hole" in the course of
moulding the axle, made the following
observations.
The carrier, in consideration of certain
well-known and highly valuable rights
granted to it by the public, undertakes
certain duties toward the public, among
them being to provide itself with suitable
and safe cars and vehicles in which carry
the traveling public. There is no such duty
on the manufacturer of the cars. There is
no reciprocal legal relation between him
and the public in this respect. When the
carrier elects to have another build its cars,
it ought not to be absolved by that facts
from its duty to the public to furnish safe
cars. The carrier cannot lessen its
responsibility by shifting its undertaking to
another's shoulders. Its duty to furnish safe
cars is side by side with its duty to furnish
safe track, and to operate them in a safe
manner. None of its duties in these
respects can be sublet so as to relieve it
from the full measure primarily exacted of
it by law. The carrier selects the
manufacturer of its cars, if it does not itself
construct them, precisely as it does those
who grade its road, and lay its tracks, and
operate its trains. That it does not exercise
control over the former is because it elects
to place that matter in the hands of the
manufacturer, instead of retaining the
supervising control itself. The
manufacturer should be deemed the agent
of the carrier as respects its duty to select
the material out of which its cars and
locomotive are built, as well as in
inspecting each step of their construction.
If there be tests known to the crafts of car
builders, or iron moulders, by which such
defects might be discovered before the
part was incorporated into the car, then the
failure of the manufacturer to make the test
will be deemed a failure by the carrier to
make it. This is not a vicarious
responsibility. It extends, as the necessity
of this business demands, the rule of
respondeat superior to a situation which
falls clearly within its scope and spirit.
Where an injury is inflicted upon a
passenger by the breaking or wrecking of
a part of the train on which he is riding, it is
presumably the result of negligence at
some point by the carrier. As stated by
Judge Story, in Story on Bailments, sec.
601a: "When the injury or damage
happens to the passenger by the breaking
down or overturning of the coach, or by
any other accident occurring on the
ground, the presumption prima facie is that
it occurred by the negligence of the
coachmen, and onus probandi is on the
proprietors of the coach to establish that
there has been no negligence whatever,
and that the damage or injury has been
occasioned by inevitable casualty, or by
some cause which human care and
foresight could not prevent; for the law will,
in tenderness to human life and limb, hold
the proprietors liable for the slightest
negligence, and will compel them to repel
by satisfactory proofs every imputation
thereof." When the passenger has proved
his injury as the result of a breakage in the
car or the wrecking of the train on which he
was being carried, whether the defect was
in the particular car in which he was riding
or not, the burden is then cast upon the
carrier to show that it was due to a cause
or causes which the exercise of the utmost
human skill and foresight could not
prevent. And the carrier in this connection
must show, if the accident was due to a
latent defect in the material or construction
of the car, that not only could it not have
discovered the defect by the exercise of
such care, but that the builders could not
by the exercise of the same care have
discovered the defect or foreseen the
result. This rule applies the same whether
the defective car belonged to the carrier or
not.
187
In the case now before us, the record is to the
effect that the only test applied to the steering
knuckle in question was a purely visual inspection
every thirty days, to see if any cracks developed.
It nowhere appears that either the manufacturer or
the carrier at any time tested the steering knuckle
to ascertain whether its strength was up to
standard, or that it had no hidden flaws would
impair that strength. And yet the carrier must have
been aware of the critical importance of the
knuckle's resistance; that its failure or breakage
would result in loss of balance and steering control
of the bus, with disastrous effects upon the
passengers. No argument is required to establish
that a visual inspection could not directly
determine whether the resistance of this critically
important part was not impaired. Nor has it been
shown that the weakening of the knuckle was
impossible to detect by any known test; on the
contrary, there is testimony that it could be
detected. We are satisfied that the periodical
visual inspection of the steering knuckle as
practiced by the carrier's agents did not measure
up to the required legal standard of "utmost
diligence of very cautious persons" — "as far as
human care and foresight can provide", and
therefore that the knuckle's failure can not be
considered a fortuitous event that exempts the
carrier from responsibility (Lasam vs. Smith, 45
Phil. 657; Son vs. Cebu Autobus Co., 94 Phil.,
892.)
It may be impracticable, as appellee argues, to
require of carriers to test the strength of each and
every part of its vehicles before each trip; but we
are of the opinion that a due regard for the carrier's
obligations toward the traveling public demands
adequate periodical tests to determine the
condition and strength of those vehicle portions
the failure of which may endanger the safe of the
passengers.
As to the damages suffered by the plaintiffs, we
agree with appellee that no allowance may be
made for moral damages, since under Article 2220
of the new Civil Code, in case of suits for breach
of contract, moral damages are recoverable only
where the defendant acted fraudulently or in bad
faith, and there is none in the case before us. As
to exemplary damages, the carrier has not acted
in a "wanton, fraudulent, reckless, oppressive or
malevolent manner" to warrant their award.
Hence, we believe that for the minor Precillano
Necesito (G. R. No. L-10605), an indemnity of
P5,000 would be adequate for the abrasions and
fracture of the femur, including medical and
hospitalization expenses, there being no evidence
that there would be any permanent impairment of
his faculties or bodily functions, beyond the lack of
anatomical symmetry. As for the death of Severina
Garces (G. R. No. L-10606) who was 33 years old,
with seven minor children when she died, her heirs
are obviously entitled to indemnity not only for the
incidental loses of property (cash, wrist watch and
merchandise) worth P394 that she carried at the
time of the accident and for the burial expenses of
P490, but also for the loss of her earnings (shown
to average P120 a month) and for the deprivation
of her protection, guidance and company. In our
judgment, an award of P15,000 would be
adequate (cf Alcantara vs. Surro, 49 Off. Gaz.
2769; 93 Phil., 472).
The low income of the plaintiffs-appellants makes
an award for attorney's fees just and equitable
(Civil Code, Art. 2208, par. 11). Considering that
he two cases filed were tried jointly, a fee of
P3,500 would be reasonable.
In view of the foregoing, the decision appealed
from is reversed, and the defendants-appellees
are sentenced to indemnify the plaintiffs-
appellants in the following amounts: P5,000 to
Precillano Necesito, and P15,000 to the heirs of
the deceased Severina Garces, plus P3,500 by
way of attorney's fees and litigation expenses.
Costs against defendants-appellees. So ordered.
Paras, C. J., Bengzon, Reyes, A., Bautista Angelo,
Concepcion, and Endencia, JJ., concur.
Felix, J., concurs in the result.
SECOND DIVISION
G.R. No. 141761 July 28, 2006
BANKARD, INC., petitioner,
vs.
DR. ANTONIO NOVAK FELICIANO, respondent.
DECISION
PUNO, J.:
Before us is a petition for review under Rule 45 of
the May 31, 1999 Decision1 and January 28, 2000
Resolution2 of the Court of Appeals in CA-G.R. CV
No. 56734 which modified the July 22, 1997
Decision3 of the Regional Trial Court (RTC) of
188
Makati City, Branch 148, in Civil Case No. 95-
1492.
The facts are as follows:
Respondent Dr. Antonio Novak Feliciano is the
holder of PCIBank Mastercard No. 5407-2610-
0000-5864, issued and managed by petitioner
Bankard, Inc. An extension of the card, PCIBank
Mastercard No. 5407-2611-0000-5863, was
issued to his wife, Mrs. Marietta N. Feliciano.
On June 19, 1995, respondent used his PCIBank
Mastercard No. 5407-2610-0000-5864 to pay a
breakfast bill in Toronto, Canada. The card was,
however, dishonored for payment. Respondent's
guests, Dr. Bellaflor Bumanlag and three other
Filipino doctors based in Canada, had to pay the
bill. Respondent immediately called the US toll-
free number of petitioner to inquire on the cause of
dishonor. He was informed that the reason was the
nonpayment of his last billing statement.
Respondent denied that he failed to pay, and
requested the person on the line to verify the
correct status of his credit card again. Respondent
likewise called his secretary in the Philippines to
confirm the fact of payment, and requested her to
advise petitioner's office in Manila.
The following day, respondent met with Dr.
Bumanlag to reimburse her for the cost of the
breakfast the previous day. Thereafter, Dr.
Bumanlag accompanied the respondent to the
Eddie Bauer Fairview Mall, a prestigious mall in
Toronto, where the latter bought several dressing
items. Respondent presented his PCIBank
Mastercard No. 5407-2610-0000-5864 for
payment. Again, the card was dishonored to the
embarrassment of the respondent. Worse, the
manager of the department store confiscated the
card in front of Dr. Bumanlag and other shoppers.
Respondent protested but the manager called
security and forcibly retained the card. To end the
commotion that ensued, respondent just asked for
a receipt for the confiscated card.
On October 5, 1995, respondent filed a complaint
against petitioner Bankard, Inc. and Mastercard
International for breach of contractual rights and
damages before the RTC-Makati City, docketed as
Civil Case No. 95-1492. Respondent alleged that
he is a holder in good standing for more than ten
(10) years of PCIBank Mastercard No. 5407-2610-
0000-5864, and that petitioner and Mastercard
International reneged on their agreement by
suspending the services of the card without notice
to him. As a result of the suspension and
confiscation of his card in Toronto, Canada,
respondent suffered social humiliation,
embarrassment and besmirched reputation. The
Canadian-based doctors, who were his guests
during the breakfast meeting in Toronto and whom
he expected to donate at least fifty thousand
Canadian dollars to his charitable clinic in Makati,
withdrew their contributions because of the
incidents. Respondent prayed for P1,000,000.00
in actual damages representing the peso
equivalent of the aborted
contributions, P1,000,000.00 for moral
damages, P200,000.00 for exemplary damages,
and P100,000.00 for attorney's fees and costs of
suit.
In defense, petitioner claimed due diligence before
suspending the privileges of respondent's credit
card. Petitioner alleged that on June 13, 1995, it
received a fraud alert or warning bulletin4 from
Bank International Indonesia. A fraud alert or
warning bulletin is a notice by telex5 or telephone
addressed to the issuer of a card when a
fraudulent or counterfeit use of the card has been
detected or suspected by an acquirer. In the June
13, 1995 fraud alert, PCIBank Mastercard No.
5407-2611-0000-5863 was listed as having had a
suspected counterfeit transaction in Indonesia on
June 11, 1995. Petitioner's fraud analyst, Mr.
Ferdinand Lopez, then accessed petitioner's
directory of cardholders to identify the holder of
PCIBank Mastercard No. 5407-2611-0000-5863.
The directory showed that the principal cardholder
for PCIBank Mastercard No. 5407-2611-0000-
5863 was respondent Dr. Antonio Novak
Feliciano, and that the credit card was the
extension card issued to his wife, Marietta
Feliciano. Mr. Lopez immediately called
respondent at his clinic but the latter was not there.
Neither he nor his wife was at home.
Consequently, Mr. Lopez left his name, telephone
number, and a message for respondent to return
his call, to the woman who answered the phone.
He likewise inquired from the woman whether
respondent and his wife were in the country or
whether they had just arrived from abroad. The
woman answered "no." With that information and
considering that Indonesia has a high incidence of
counterfeit credit card transactions, Mr. Lopez
concluded that the transaction involving PCIBank
Mastercard No. 5407-2611-0000-5863 was
counterfeit. He sent a notice of card account
blocking to the Authorization Department. He
likewise sent a written notice to the Felicianos that
PCIBank Mastercard No. 5407-2611-0000-5863
had a counterfeit movement in another country
and that petitioner is temporarily suspending the
services of the card including the principal card,
PCIBank Mastercard No. 5407-2610-0000-5864,
pending investigation on the matter. The
189
Felicianos were required to submit an affidavit of ITSELF AND THE RESPONDENT FROM
disclaim and photocopies of their passports. The ANYONE WRONGFULLY USING HIS
Felicianos did not respond to the notification. CREDIT CARD AND NOT OUT OF
MALICE, OR ANY DELIBERATE INTENT
On July 22, 1997, the trial court decided the case TO CAUSE HARM TO RESPONDENT.
in favor of respondent.6It found that petitioner's
negligence was the immediate and proximate C. CONTRARY TO THE FINDINGS OF
cause of respondent's injury. Although the claim THE TRIAL COURT WHICH THE COURT
for actual damages was disallowed for lack of OF APPEALS AFFIRMED, PETITIONER
proof, petitioner was ordered to pay: WAS NOT GUILTY OF NEGLIGENCE IN
(1) P1,000,000.00 as moral damages, SUSPENDING RESPONDENT'S CREDIT
(2) P200,000.00 as exemplary damages, and CARD. ASSUMING ARGUENDO THAT
(3) P100,000.00 for attorney's fees and costs of PETITIONER WAS NEGLIGENT IN
suit. Petitioner was likewise ordered to restore DOING SO, THE SAME DOES NOT
respondent's good name with the merchant WARRANT A FINDING OF MALICE OR
establishment in Canada which confiscated his BAD FAITH AS TO JUSTIFY GRANTING
Mastercard, and to return the card with apologies AN AWARD OF MORAL DAMAGES IN
to respondent. THE STAGGERING AMOUNT
OF P800,000.00.
Petitioner assailed the decision in a petition for
review with the Court of Appeals. In its Decision D. IN THE ABSENCE OF AN AWARD OF
dated May 31, 1999,7the Court of Appeals affirmed ACTUAL DAMAGES, RESPONDENT IS
the trial court's finding of negligence on the part of NOT ENTITLED TO MORAL DAMAGES.
the petitioner. However, the appellate court
modified the trial court's decision by deleting the E. THE HONORABLE COURT HAS
award for exemplary damages, and by reducing REPEATEDLY ADMONISHED AGAINST
moral damages to P800,000.00, and attorney's GRANTING EXCESSIVE MORAL
fees and costs of suit to P50,000.00. Actual DAMAGES WHICH ARE NOT INTENDED
damages was still disallowed for lack of proof. TO ENRICH A COMPLAINANT AT THE
Petitioner's motion for partial reconsideration was EXPENSE OF A DEFENDANT.
denied. Hence, this petition.
II.
Petitioner assigns the following errors:
THE COURT OF APPEALS ERRED IN
I. AWARDING ATTORNEY'S FEES TO
RESPONDENT CONSIDERING THAT
THE COURT OF APPEALS ERRED IN PETITIONER ACTED IN GOOD FAITH AND
AWARDING RESPONDENT MORAL DAMAGES WITH DUE DILIGENCE IN SUSPENDING
IN THE EXCESSIVE AND UNPRECEDENTED RESPONDENT'S CREDIT CARD.
AMOUNT OF P800,000.00, WITHOUT ANY
LEGAL OR FACTUAL BASIS, CONSIDERING III.
THAT:
THE COURT OF APPEALS ERRED IN TOTALLY
A. NO EVIDENCE WAS PRESENTED TO DISREGARDING THE CONTRACT BETWEEN
SHOW THAT PETITIONER ACTED THE PARTIES WHICH, AMONG OTHERS,
FRAUDULENTLY OR IN BAD FAITH OR EXPRESSLY STIPULATES THAT
IN A WANTON, RECKLESS AND RESPONDENT WOULD HOLD PETITIONER
OPPRESSIVE MANNER IN "FREE AND HARMLESS FROM ANY CLAIM OF
SUSPENDING RESPONDENT'S CREDIT DAMAGES ARISING FROM THE FAILURE OF
CARD. ANY ACCREDITED ESTABLISHMENT TO
HONOR" HIS CREDIT CARD.
B. EVEN AS IT WAS RESPONDENT'S
DUTY TO AFFIRMATIVELY PROVE HIS IV.
CLAIM FOR MORAL DAMAGES,
PETITIONER HAS DULY ESTABLISHED THE COURT OF APPEALS ERRED IN NOT
THAT IT WAS PROMPTED TO FINDING THAT RESPONDENT WAS
SUSPEND THE CREDIT CARD OF CONTRIBUTORILY NEGLIGENT IN
RESPONDENT SOLELY TO PROTECT CONTINUING TO USE HIS CREDIT CARD ON

190
20 JUNE 1995 DESPITE THE FACT THAT IT
HAD ALREADY BEEN PREVIOUSLY
DISHONORED THE DAY BEFORE WHEN HE
FIRST ATTEMPTED TO USE IT AFTER HIS
PURPORTED BREAKFAST MEETING WITH
SOME DOCTORS.
We shall now resolve the issue of whether
petitioner is liable to respondent for moral
damages and attorney's fees.
The award of moral damages is governed by
Section 1, Chapter 3, Title XVIII, Book IV of
the Civil Code. Article 2220 provides:
Willful injury to property may be a legal
ground for awarding moral damages if the
court should find that, under the
circumstances, such damages are justly
due. The same rule applies to breaches
of contract where the defendant acted
fraudulently or in bad faith. (emphasis
added)
Under the foregoing, moral damages may be
recovered in culpa contractual where the
defendant acted in bad faith or with malice in the
breach of the contract.8Malice or bad faith implies
moral obliquity or a conscious and intentional
design to do a wrongful act for a dishonest
purpose.9However,a conscious or intentional
design need not always be present since
negligence may occasionally be so gross as to
amount to malice or bad faith.10 Bad faith, in the
context of Art. 2220 of the Civil Code,
includes gross negligence.11 Thus, we have held
in a number of cases that moral damages may be
awarded in culpa contractual or breach of contract
when the defendant acted fraudulently or in bad
faith, or is guilty of gross negligence amounting to
bad faith, or in wanton disregard of his contractual
obligations.12
Petitioner alleged that it suspended the privileges
of respondent's credit card only after it received
the fraud alert from Indonesia, and after its fraud
analyst, Mr. Lopez, tried to contact both the
respondent and his wife at his clinic and at home.
At first blush, bad faith or malice appears not to be
attributable to petitioner. However, we find that its
efforts at personally contacting respondent
regarding the suspension of his credit card fall
short of the degree of diligence required by the
circumstances.
Petitioner received the fraud alert on June 13,
1995. The following day, petitioner's fraud analyst
tried to call up respondent at his clinic and at
home, to no avail. Apart from this attempt,
however, no further effort was exerted to
personally inform respondent about the
cancellation of his card. Petitioner had more than
enough time within which to do so considering that
it was not until four (4) days later or June 18, 1995
that respondent left for Canada. But, petitioner's
Mr. Lopez contented himself with just leaving a
message with an unidentified woman in
respondent's house for the latter to return his call.
Before receiving the return call, respondent's
PCIBank Mastercard No. 5407-2610-0000-5864
and that of his wife, PCIBank Mastercard No.
5407-2611-0000-5863, had been blocked on June
15, 1995. To be sure, a notice of card account
blocking was sent to respondent. However, by the
ordinary course of mail, the notice was not
expected to reach respondent for several days yet.
Despite the possibility that respondent or his wife
may have occasion to use their credit cards,
petitioner's fraud analyst made no further attempt
to contact and warn them. Thus, respondent left
for Canada on June 18, 1995 armed with his
PCIBank Mastercard No. 5407-2610-0000-5864
but totally unaware that the card had been blocked
three (3) days previously, and that he was not to
use the same.
Petitioner claims that it suspended respondent's
card to protect him from fraudulent transactions.
However, while petitioner's motive has to be
lauded, we find it lamentable that petitioner was
not equally zealous in protecting respondent from
potentially embarrassing and humiliating situations
that may arise from the unsuspecting use of his
suspended PCIBank Mastercard No. 5407-2610-
0000-5864. Considering the widespread use of
access devices in commercial and other
transactions,13 petitioner and other issuers of
credit cards should not only guard against
fraudulent uses of credit cards but should also be
protective of genuine uses thereof by the true
cardholders. In the case at bar, the duty is much
more demanding for the evidence shows that
respondent is a credit cardholder for more than ten
(10) years in good standing, and has not been
shown to have violated any of the provisions of his
credit card agreement with petitioner. Considering
the attendant circumstances, we find petitioner to
have been grossly negligent in suspending
respondent's credit card. To reiterate, moral
damages may be awarded in a breach of contract
when the defendant acted fraudulently or in bad
faith, or is guilty of gross negligence amounting to
bad faith.14
With respect to the amount of moral damages to
be awarded, the well-entrenched principle is that
191
the grant thereof depends upon the discretion of
the court considering the circumstances of each
case.15 In the case at bar, it is undisputed that
respondent's PCIBank Mastercard No. 5407-
2610-0000-5864 was dishonored in a foreign
country where the respondent was not expected to
have family members or close friends nearby to
lend him a helping hand. It was twice dishonored
in public places. Worse, the card was first
dishonored during a breakfast-cum-business
meeting with respected medical colleagues based
in that country. Respondent had absolutely no
inkling then that there was a problem with his card.
Moreover, he had no reason to think that
something was amiss since he is a member in
good standing for more than ten (10) years and
had no previous bad experience with the card.
However, since moral damages are patently not
meant to enrich the complainant at the expense of
the defendant and should only be commensurate
with the actual loss or injury suffered,16 we reduce
the amount awarded by the Court of Appeals
from P800,000.00 to P500,000.00.
We likewise affirm the award for attorney's fees.
Plaintiff was compelled to litigate to protect his
interest, and the lower courts deemed it just and
equitable to award him attorney's fees.17 The
respondent had to vindicate his rights up to the
highest court of the land.
IN VIEW WHEREOF, the petition is DENIED. The
assailed Decision of the Court of Appeals, dated
May 31, 1999, granting moral damages and
attorney's fees to respondent, as well as its
Resolution dated January 28, 2000 in CA-G.R. CV
No. 56734, is AFFIRMED with the sole
modification that the amount of moral damages
is REDUCED to P500,000.00.
SO ORDERED.
Sandoval-Gutierrez, Corona, Azcuna, Garcia,
J.J., concur.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 84281 May 27, 1994
CITYTRUST BANKING
CORPORATION, petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT and
EMME HERRERO, respondents.
Agcaoili and Associates for petitioner.
David B. Agoncillo for private respondent.
Humberto B. Basco, collaborating counsel for
private respondent.
VITUG, J.:
This case emanated from a complaint filed by
private respondent Emme Herrero for damages
against petitioner Citytrust Banking Corporation. In
her complaint, private respondent averred that
she, a businesswoman, made regular deposits,
starting September of 1979, with petitioner
Citytrust Banking Corporation at its Burgos branch
in Calamba, Laguna. On 15 May 1980, she
deposited with petitioner the amount of Thirty One
Thousand Five Hundred Pesos (P31,500.00), in
cash, in order to amply cover six (6) postdated
checks she issued, viz:
Check No. Amount
007383 — P1,507.00
007384 — 1,262.00
007387 — 4,299.00
007387 — 2,204.00
007492 — 6,281.00
007400 — 4,716.00
When presented for encashment upon
maturity, all the checks were dishonored
due to "insufficient funds." The last check
No. 007400, however, was personally
redeemed by private respondent in cash
before it could be redeposited.
Petitioner, in its answer, asserted that it was due
to private respondent's fault that her checks were
dishonored. It averred that instead of stating her
correct account number, i.e., 29000823, in her
deposit slip, she inaccurately wrote 2900823.
The Regional Trial Court (Branch XXXIV) of
Calamba, Laguna, on
27 February 1984, dismissed the complaint for
lack of merit; thus:
WHEREFORE, judgment is hereby
rendered in favor of the defendant and
against the plaintiff, DISMISSING the
complaint for lack of merit, plaintiff is
hereby adjudged to pay the defendant
reasonable attorney's fee in the amount of
FIVE THOUSAND PESOS (P5,000.00)
plus cost of suit.
192
Private respondent went to the Court of Appeals,
which found the appeal meritorious. Hence, it
rendered judgment, on 15 July 1988, reversing the
trial court's decision. The appellate court ruled:
WHEREFORE, the judgment appealed
from is REVERSED and a new one
entered thereby ordering defendant to pay
plaintiff nominal damages of P2,000.00,
temperate and moderate damages of
P5,000.00, and attorney's fees of
P4,000.00.
The counterclaim of defendant is
dismissed for lack of merit, with costs
against him.
Petitioner Citytrust Banking Corporation is now
before us in this petition for review on certiorari.
Petitioner bank concedes that it is its obligation to
honor checks issued by private respondent which
are sufficiently funded, but, it contends, private
respondent has also the duty to use her account in
accordance with the rules of petitioner bank to
which she has contractually acceded. Among such
rules, contained in its "brochures" governing
current account deposits, is the following printed
provision:
In making a deposit . . . kindly insure
accuracy in filing said deposit slip forms as
we hold ourselves free of any liability for
loss due to an incorrect account number
indicated in the deposit slip although the
name of the depositor is correctly written.
Exactly the same issue was addressed by the
appellate court, which, after its deliberations,
made the following findings and conclusions:1
We cannot uphold the position of
defendant. For, even if it be true that there
was error on the part of the plaintiff in
omitting a "zero" in her account number,
yet, it is a fact that her name, "Emme E.
Herrero", is clearly written on said deposit
slip (Exh. "B"). This is controlling in
determining in whose account the deposit
is made or should be posted. This is so
because it is not likely to commit an error
in one's name than merely relying on
numbers which are difficult to remember,
especially a number with eight (8) digits as
the account numbers of defendant's
depositors. We view the use of numbers as
simply for the convenience of the bank but
was never intended to disregard the real
name of its depositors. The bank is
engaged in business impressed with
public interest, and it is its duty to protect
in return its many clients and depositors
who transact business with it. It should not
be a matter of the bank alone receiving
deposits, lending out money and collecting
interests. It is also its obligation to see to it
that all funds invested with it are properly
accounted for and duly posted in its
ledgers.
In the case before Us, We are not
persuaded that defendant bank was not
free from blame for the fiasco. In the first
place, the teller should not have accepted
plaintiff's deposit without correcting the
account number on the deposit slip which,
obviously, was erroneous because, as
pointed out by defendant, it contained only
seven (7) digits instead of eight (8).
Second, the complete name of plaintiff
depositor appears in bold letters on the
deposit slip (Exh. "B"). There could be no
mistaking in her name, and that the deposit
was made in her name, "Emma E.
Herrero." In fact, defendant's teller should
not have fed her deposit slip to the
computer knowing that her account
number written thereon was wrong as it
contained only seven (7) digits. As it
happened, according to defendant,
plaintiff's deposit had to be consigned to
the suspense accounts pending
verification. This, indeed, could have been
avoided at the first instance had the teller
of defendant bank performed her duties
efficiently and well. For then she could
have readily detected that the account
number in the name of "Emma E. Herrero"
was erroneous and would be rejected by
the computer. That is, or should be, part of
the training and standard operating
procedure of the bank's employees. On
the other hand, the depositors are not
concerned with banking procedure. That is
the responsibility of the bank and its
employees. Depositors are only
concerned with the facility of depositing
their money, earning interest thereon, if
any, and withdrawing therefrom,
particularly businessmen, like plaintiff, who
are supposed to be always "on-the-go".
Plaintiff's account is a "current account"
which should immediately be posted. After
all, it does not earn interest. At least, the
forbearance should be commensurated
with prompt, efficient and satisfactory
service.
193
 Bank clients are supposed to rely on the
services extended by the bank, including
the assurance that their deposits will be
duly credited them as soon as they are
made. For, any delay in crediting their
account can be embarrassing to them as
in the case of plaintiff.
We agree with plaintiff that —
. . . even in computerized systems
of accounts, ways and means are
available whereby deposits with
erroneous account numbers are
properly credited depositor's
correct account numbers. They
add that failure on the part of the
defendant to do so is negligence
for which they are liable. As proof
thereof plaintiff alludes to five
particular incidents where plaintiff
admittedly wrongly indicated her
account number in her deposit
slips
(Exhs. "J", "L", "N", "O" and "P"),
but were nevertheless properly
credited her deposit (pp. 4-5,
Decision).
We have already ruled in Mundin v. Far
East Bank & Trust Co., AC-G.R. CV No.
03639, prom. Nov. 2, 1985, quoting the
court a quo in an almost identical set of
facts, that —
Having accepted a deposit in the
course of its business
transactions, it behooved upon
defendant bank to see to it and
without recklessness — that the
depositor was accurately credited
therefor. To post a deposit in
somebody else's name despite the
name of the depositor clearly
written on the deposit slip is indeed
sheer negligence which could
have easily been avoided if
defendant bank exercised due
diligence and circumspection in
the acceptance and posting of
plaintiff's deposit.
We subscribe to the above disquisitions of the
appellate court. In Simex International (Manila),
Inc. vs. Court of Appeals, 183 SCRA 360,
reiterated in Bank of Philippine Islands
vs. Intermediate Appellate Court, 206 SCRA 408,
we similarly said, in cautioning depository banks
on their fiduciary responsibility, that —
In every case, the depositor expects the
bank to treat his account with utmost
fidelity, whether such account consists
only of a few hundred pesos or of millions.
The bank must record every single
transaction accurately, down to the last
centavo, and as promptly as possible. This
has to be done if the account is to reflect
at any given time the amount of money the
depositor can dispose of as he sees fit,
confident that the bank will deliver it as and
to whomever he directs. A blunder on the
part of the bank, such as the dishonor of a
check without good reason, can cause the
depositor not a little embarrassment if not
also financial loss and perhaps even civil
and criminal litigation.
The point is that as a business affected
with public interest and because of the
nature of its functions, the bank is under
obligation to treat the accounts of its
depositors with meticulous care, always
having in mind the fiduciary nature of their
relationship.
We agree with petitioner, however, that it is wrong
to award, along with nominal damages, temperate
or moderate damages. The two awards are
incompatible and cannot be granted concurrently.
Nominal damages are given in order that a right of
the plaintiff, which has been violated or invaded by
the defendant, may be vindicated or recognized,
and not for the purpose of indemnifying the plaintiff
for any loss suffered by him (Art. 2221, New Civil
Code; Manila Banking Corp. vs. Intermediate
Appellate Court, 131 SCRA 271). Temperate or
moderate damages, which are more than nominal
but less than compensatory damages, on the other
hand, may be recovered when the court finds that
some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be
proved with reasonable certainty (Art. 2224, New
Civil Code).
In the instant case, we also find need for
vindicating the wrong done on private respondent,
and we accordingly agree with the Court of
Appeals in granting to her nominal damages but
not in similarly awarding temperate or moderate
damages.
WHEREFORE, the appealed decision is
MODIFIED by deleting the award of temperate or
moderate damages. In all other respects, the
194
appellate court's decision is AFFIRMED. No costs
in this instance.
SO ORDERED.
Feliciano, Bidin, Romero and Melo, JJ., concur.
EN BANC
G.R. No. 137842 August 23, 2001
PEOPLE OF THE PHILIPPINES, plaintiff-
appellee,
vs.
DANILO CATUBIG y HORIO, accused-appellant.
VITUG, J.:
In an information, dated 29 January 1998, the
accused, Danilo Catubig y Horio, was charged
with the crime of rape before the Regional Trial
Court, Branch 78, of Malolos, Bulacan; viz:
"The undersigned Asst. Provincial
Prosecutor on complaint of the offended
party Dannilyn Catubig y Lazaro accuses
Danilo Catubig y Horio of the crime of rape,
penalized under the provisions of Art. 335
of the Revised Penal Code, committed as
follows:
"That on or about the 27th day of
November, 1997, in the municipality of
San Jose del Monte, province of Bulacan,
Philippines, and within the jurisdiction of
this Honorable Court, the above-named
accused, did then and there wilfully,
unlawfully and feloniously, by means of
force, threats and intimidation and with
lewd design have carnal knowledge of the
said offended party against her will."1
When arraigned on 16 July 1998, accused
Catubig, represented by counsel de oficio,
pleaded "not guilty" to the offense charged;
forthwith, trial ensued.
The case for the prosecution was laid bare in
Appellee's Brief submitted by the Office of the
Solicitor General.
"On November 27, 1997, at around 4:00
o'clock in the afternoon, private
complainant Dannilyn Catubig, who was
born on August 9, 1985, and her four (4)
younger siblings were watching television
in the sala of their house located at Sunlife
Subdivision, San Jose del Monte, Bulacan.
"After an hour, Dannilyn's father, herein
appellant Danilo Catubig, arrived and told
Dannilyn's siblings to proceed, as in fact
they did proceed, to her aunt's house
which is just located nearby. Thereafter,
appellant told Dannilyn to go inside a room
and to lie down on the bed. After Dannilyn
had complied, appellant removed
Dannilyn's shorts and panty, while
appellant, after removing his brief and t-
shirt, [laid] on top of Dannilyn. Afraid of
appellant who beat and raped her in the
past, Dannilyn was not able to resist
appellant who succeeded in inserting his
penis into Dannilyn's vagina.
"However, Dannilyn's aunt, who got
suspicious of what appellant was doing to
Dannilyn, informed the latter's mother,
Jocelyn Catubig, about the said suspicion.
Thus, when confronted by her mother,
Dannilyn was forced to reveal that she was
indeed raped by appellant. The sexual
assault was reported to the San Jose del
Monte Police Station where Dannilyn's
sworn statement was subsequently taken
on December 3, 1997.
"Upon the request of the police authorities,
Dannilyn was examined on December 1,
1997 by Dr. Wilfredo E. Tiera, Medico-
Legal Officer of the National Bureau of
Investigation, who found out that
Dannilyn's healed laceration in the hymen
was caused by sexual intercourse."2
The accused denied the accusation against him.
He claimed that the rape charge was brought
about only because of the ill-will between him, on
the one hand, and his wife and daughter Dannilyn,
on the other hand, following a quarrel. On 27
November 1997, he asseverated, he had fought
with his wife, hitting her and his daughter. His wife
then threatened him that it was the last time that
she would allow him to harm her and that he would
regret what he did. True to her foreboding, the next
day, he was arrested and a complaint for rape was
filed against him.
195
On 11 December 1998, the Regional Trial Court
rendered a decision holding the accused guilty of
the crime of rape; it adjudged:
"WHEREFORE, in view of the foregoing,
the Court hereby finds accused DANILO
CATUBIG Y HORIO GUILTY beyond
reasonable doubt of the crime of Rape
defined and penalized under Article 335 of
the Revised Penal Code, as amended by
Republic Act No. 7659, and hereby
sentences him to suffer the penalty of
DEATH, and to pay private complainant
Dannilyn Catubig the amount of Fifty
Thousand Pesos (P50,000.00) as moral
damages."3
With the imposition of the death penalty by the trial
court, the records were elevated to this Court for
automatic review.
In his brief, appellant submitted thusly:
"1. The lower court erred in finding the
accused guilty of the crime of rape in
violation of Article 335 of the Revised
Penal Code as amended by Republic Act
7659.
"2. The lower court erred in not taking into
consideration the fact that the information
was defective for failure to state that the
accused is the father of the victim and that
the victim was under 18 years [of] age at
the time of the commission of the alleged
rape."4
Private complainant Dannilyn Catubig narrated
how she was repeatedly abused by her own father;
she testified:
"Q: Now, after your sisters and brother
[went] to the house of your aunt, what did
your father do?
"A: He instructed me to go inside the room.
"Q: How many rooms were there in your
house?
"A: Only one.
"Q: Did you go to the room per instruction?
"A: Yes, sir.
"Q: And what happened inside the room?
"A: My father entered the room.
"Q: And when your father entered the
room, what did he do next?
"A: He removed my short [pants] and my
panty.
"Q: What was your position at that time
when your father removed your short
pants and panty?
"A: I was lying.
"Q: When you entered the room, did you
lie immediately?
"A: No, I just sat.
"Q: How come as you claimed a while ago,
you were lying when your father removed
your short pants and panty?
"A: Once I entered the room, I was sitting
then he removed my short [pants] and
panty.
"Q: You said upon entering the room, you
sat and while sitting, all of a sudden your
father removed your short pants and panty
while already lying at that time, how come
you were lying when according to you, you
were sitting inside the room?
"A: I was sitting first and he instructed me
to lie down.
"Q: While you were sitting inside the room
and you were instructed by your father to
lie, what comes to your mind?
"A: That he will rape me.
"Q: How did you come to know that?
"A: He was raping me before, doing that
before.
"Q: In other words, that was not the first
time your father raped you on that
particular date?
"A: No, sir.
"Q: When was the first time, if you
remember?
196
"A: When I was still in grade 1.
"Q: How many times were you raped by
your father?
"A: I can no longer remember how many it
was — several.
"Q: When was the last time your father
raped you?
"A: November 27.
"Q: Now, when your father removed your
short pants and panty, what did he do
next?
"A: He removed his brief and shirt.
"Q: After removing his brief and shirt, what
did he do?
"A: He [laid] on top me.
"Q: When your father [laid] on top of you,
what did he do?
"A: He was inserting his penis to my
vagina.
"Q: At this juncture, may we make of
record that witness starts to cry.
"Q: How did you know your father inserted
his penis to your vagina?
"A: I can feel it and it is painful.
"Q: That was the time when your father
was already lying on top of you?
"A: Yes, sir.
"Q: And what was the movement of the
body of your father while he was lying on
top of you?
"A: Push and pull movement.
"Q: For how long did your father stay on
top of you doing that push and pull
movement?
"A: That must be about 1 hour, but my aunt
arrived.
"Q: Aside from the pain, what else did you
feel?
"A: Mahapdi at parang may pumipitik sa
loob ng ari ko.
"Q: Did you not try to resist?
"A: No, because I am afraid of him.
"Q: You are afraid of your father?
"A: Yes, sir.
"Q: Afraid of what?
"A: Because he was beating us, hitting us.
"Q: Why, what was the reason why your
father was hitting you?
"A: To threaten us.
"Q: For what purpose?
"A: Whenever my mother sided with us, my
father and mother engaged in a fight.
"Q: In this case, you were raped and
sexually abused by your father, what made
you afraid of him?
"A: Because we were afraid of my father
since childhood."5
Dannilyn has given her testimony in a plain,
categorical, spontaneous and frank manner,
remaining consistent throughout, and there is
hardly anything on record that can cast doubt on
her sincerity. The revelations of an innocent child
whose chastity has been abused, coupled with her
willingness to face police investigation and to
undergo the trouble and humiliation of a public
trial, should merit credence unless strong
justifications dictate otherwise. Indeed, it would
take a most senseless kind of depravity for a
young daughter to just make up a story which
could put her own father to an undeserved
indictment and to even possibly face death in the
hands of the law.6
When rape is committed against one's own
daughter, the moral ascendancy and influence of
the father, that necessarily flows from his parental
authority, can sufficiently cow the child to
submission and can rightly be held to substitute for
the requisite "violence or intimidation" that,
197
normally, would be characterized by physical acts
and uttered threats made on the victim.
The trite defenses of alibi and denial proferred by
appellant cannot prevail over the positive and
categorical statements of private
complainant. Alibi is often viewed with suspicion
and received with caution not only because it is
inherently weak and unreliable but also because it
is easy to fabricate. In order that this defense can
prosper, it must be convincing to preclude any
doubt on the physical impossibility of the presence
of the accused at the locus criminis at the time of
the incident. These conditions have not been met
in the case at bar.
The contention of appellant that his wife and
daughter Dannilyn have accused him merely
because of his violent ways is much too flimsy to
be believed. The mere resentment of a wife and
daughter is not so compelling as to have motivated
them to wrongly lodge a complaint for a crime
much more serious than might, if at all, be
expected.
It is likewise a settled doctrine that the assessment
made by the trial court on the credibility of
witnesses deserves great regard and weight on
appeal. The rule is not without reason; the trial
judge has a unique position of hearing first hand
the witnesses and observing their deportment,
conduct and attitude during the course of the
testimony in open court. There is no valid reason
to now ignore this long accepted jurisprudence in
this instance.
This Court, however, finds the second assignment
of error impressed with merit.
Article 335 of the Revised Penal Code, as
amended by Section 11 of Republic Act No. 7659,
at times also referred to as the Death Penalty Law,
states in part:
"ARTICLE 335. When and how rape is
committed. x x x .
"xxx xxx xxx
"The death penalty shall also be imposed
if the crime of rape is committed with any
of the following attendant circumstances:
"1. When the victim is under eighteen (18)
years of age and the offender is a parent,
ascendant, step-parent, guardian, relative
by consanguinity or affinity within the third
civil degree, or the common-law spouse of
the parent of the victim."
The concurrence of the minority of the victim and
her relationship to the offender are special
qualifying circumstances that are needed to be
alleged in the complaint or information for the
penalty of death to be decreed.7The Constitution
guarantees to be inviolable the right of an accused
to be informed of the nature and cause of the
accusation against him.8 It is a requirement that
renders it essential for every element of the
offense with which he is charged to be properly
alleged in the complaint or information.
Here, the information failed to state the minority of
the victim and her relationship with the offender,
both special qualifying circumstances under
Republic Act No. 7659, and for want of such
allegations, the trial court erred in imposing the
death penalty on the accused.9 Appellant could
only thus be convicted under Article 335 of the
Revised Penal Code, as amended, of simple rape
punishable by reclusion perpetua.
Anent the award of damages, the trial court has
correctly awarded P50,000.00 moral damages, an
award that rests on the jural foundation that the
crime of rape necessarily brings with it shame,
mental anguish, besmirched reputation, moral
shock and social humiliation to the offended
party.10 In addition, the offended party deserves to
receive the amount of P50,000.00 civil
indemnity,11 the equivalent of compensatory
damages, and exemplary damages in the amount
of P25,000.00.
An apparent discord in the award of exemplary
damages in simple and qualified rape cases
perhaps deserves more than just a passing
remark.
The Civil Code of the Philippines provides, in
respect to exemplary or corrective damages,
thusly:
"ARTICLE 2229. Exemplary or corrective
damages are imposed, by way of example
or correction for the public good, in
addition to the moral, temperate, liquidated
or compensatory damages.
"ARTICLE 2230. In criminal offenses,
exemplary damages as a part of the civil
liability may be imposed when the crime
was committed with one or more
aggravating circumstances. Such
damages are separate and distinct from
198
 fines and shall be paid to the offended
party.
"ARTICLE 2231. In quasi-delicts,
exemplary damages may be granted if the
defendant acted with gross negligence.
"ARTICLE 2232. In contracts and quasi-
contracts, the court may award exemplary
damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive,
or malevolent manner.
"ARTICLE 2233. Exemplary damages
cannot be recovered as a matter of right;
the court will decide whether or not they
should be adjudicated.
"ARTICLE 2234. While the amount of the
exemplary damages need not be proved,
the plaintiff must show that he is entitled to
moral, temperate or compensatory
damages before the court may consider
the question of whether or not exemplary
damages should be awarded. In case
liquidated damages have been agreed
upon, although no proof of loss is
necessary in order that such liquidated
damages may be recovered, nevertheless,
before the court may consider the question
of granting exemplary in addition to the
liquidated damages, the plaintiff must
show that he would be entitled to moral,
temperate or compensatory damages
were it not for the stipulation for liquidated
damages.
"ARTICLE 2235. A stipulation whereby
exemplary damages are renounced in
advance shall be null and void."
The attendance of aggravating circumstances in
the perpetration of the crime serves to increase the
penalty (the criminal liability aspect),12 as well as to
justify an award of exemplary or corrective
damages (the civil liability aspect),13 moored on the
greater perversity of the offender manifested in the
commission of the felony such as may be shown
by (1) the motivating power itself, (2) the place of
commission, (3) the means and ways employed,
(4) the time, or (5) the personal circumstances of
the offender or the offended party or both. There
are various types of aggravating circumstances,
among them, the ordinary and the qualifying.
Relationship is an alternative circumstance under
Article 15 of the Revised Penal Code.
"ARTICLE 15. Their concept. —
Alternative circumstances are those which
must be taken into consideration as
aggravating or mitigating according to the
nature and effects of the crime and other
conditions attending its commission. They
are relationship, intoxication, and degree
of instruction and education of the
offender.
"The alternative circumstance of
relationship shall be taken into
consideration when the offended party is
the spouse, ascendant, descendant,
legitimate, natural, or adopted brother or
sister, or relative by affinity in the same
degree of the offender."
As a rule, relationship is held to be aggravating in
crimes against chastity, such as rape and acts of
lasciviousness, whether the offender is a higher or
a lower degree relative of the offended party.14
Under Section 11 of Republic Act No. 7659,
amending Article 335 of the Revised Penal Code,
the death penalty is to be imposed in rape cases
"when the victim is under eighteen (18) years of
age and the offender is a parent, ascendant, step-
parent, guardian, relative by consanguinity or
affinity within the third civil degree, or the common-
law spouse of the parent of the victim." The Court
has since held that the circumstances enumerated
by the amendatory law are to be regarded as
special qualifying (aggravating) circumstances.
Somehow doubts linger on whether relationship
may then be considered to warrant an award for
exemplary damages where it is used to qualify
rape as a heinous crime, thereby becoming an
element thereof, as would subject the offender to
the penalty of death. Heretofore, the Court has not
categorically laid down a specific rule, preferring
instead to treat the issue on a case to case basis.
In People vs. Fundano,15 People vs.
Ramos, People
16
vs. Medina,17 People vs.
Dimapilis,18 People vs. Calayca,19People vs.
Tabion,20 People vs. Bayona,21 People vs.
Bayya, and People vs. Nuñez,23 along with still
22
other cases, the Court has almost invariably
appreciated relationship as an ordinary
aggravating circumstance in simple rape and
thereby imposed exemplary damages upon the
offender whether or not the offense has been
committed prior to or after the effectivity of
Republic Act No. 7659. Exceptionally, as in People
vs. Decena,24 People vs. Perez,25 People vs.
Perez,26 and People vs. Ambray,27 the Court has
denied the award of exemplary damages following
199
the effectivity of that law. In qualified rape cases,
such as in People vs. Magdato,28 People vs.
Arizapa,29 and People vs. Alicante,30 the Court
decreed the payment of exemplary damages to
the offended party but it did not do so as in People
vs. Alba,31 People vs. Mengote,32 and People vs.
Maglente.33
It may be time for the Court to abandon its pro hac
vice stance and provide, for the guidance of the
bar and the bench, a kind of standard on the
matter.
Also known as "punitive" or "vindictive" damages,
exemplary or corrective damages are intended to
serve as a deterrent to serious wrongdoings and
as a vindication of undue sufferings and wanton
invasion of the rights of an injured or a punishment
for those guilty of outrageous conduct. These
terms are generally, but not always, used
interchangeably. In common law, there is
preference in the use of exemplary damages when
the award is to account for injury to feelings and
for the sense of indignity and humiliation suffered
by a person as a result of an injury that has been
maliciously and wantonly inflicted,34 the theory
being that there should be compensation for the
hurt caused by the highly reprehensible conduct of
the defendant — associated with such
circumstances as willfulness, wantonness, malice,
gross negligence or recklessness, oppression,
insult or fraud or gross fraud35 — that intensifies the
injury. The terms punitive or vindictive damages
are often used to refer to those species of
damages that may be awarded against a person
to punish him for his outrageous conduct. In either
case, these damages are intended in good
measure to deter the wrongdoer and others like
him from similar conduct in the future.36
The term "aggravating circumstances" used by the
Civil Code, the law not having specified otherwise,
is to be understood in its broad or generic sense.
The commission of an offense has a two-pronged
effect, one on the public as it breaches the social
order and the other upon the private victim as it
causes personal sufferings, each of which is
addressed by, respectively, the prescription of
heavier punishment for the accused and by an
award of additional damages to the victim. The
increase of the penalty or a shift to a graver felony
underscores the exacerbation of the offense by the
attendance of aggravating circumstances, whether
ordinary or qualifying, in its commission. Unlike the
criminal which is basically a State concern, the
award of damages, however, is likewise, if not
primarily, intended for the offended party who
suffers thereby. It would make little sense for an
award of exemplary damages to be due the private
offended party when the aggravating circumstance
is ordinary but to be withheld when it is qualifying.
Withal, the ordinary or qualifying nature of an
aggravating circumstance is a distinction that
should only be of consequence to the criminal,
rather than to the civil, liability of the offender. In
fine, relative to the civil aspect of the case, an
aggravating circumstance, whether ordinary or
qualifying, should entitle the offended party to an
award of exemplary damages within the unbridled
meaning of Article 2230 of the Civil Code.
Relevantly, the Revised Rules on Criminal
Procedure, made effective on 01 December 2000,
requires aggravating circumstances, whether
ordinary or qualifying, to be stated in the complaint
or information. Sections 8 and 9 of Rule 110 of the
Rules of Court now provide:
"SECTION 8. Designation of the offense.
— The complaint or information shall state
the designation of the offense given by the
statute, aver the acts or omissions
constituting the offense, and specify its
qualifying and aggravating circumstances.
If there is no designation of the offense,
reference shall be made to the section or
subsection of the statute punishing it.
"SECTION 9. Cause of the accusation. —
The acts or omissions complained of as
constituting the offense and the qualifying
and aggravating circumstances must be
stated in ordinary and concise
language and not necessarily in the
language used in the statute but in
terms sufficient to enable a person of
common understanding to know what
offense is being charged as well as its
qualifying and aggravating circumstances
and for the court to pronounce judgment."
A court would thus be precluded from considering
in its judgment the attendance of "qualifying or
aggravating circumstances" if the complaint or
information is bereft of any allegation on the
presence of such circumstances.
The retroactive application of procedural rules,
nevertheless, cannot adversely affect the rights of
the private offended party that have become
vested prior to the effectivity of said rules. Thus, in
the case at bar, although relationship has not been
alleged in the information, the offense having been
committed, however, prior to the effectivity of the
new rules, the civil liability already incurred by
appellant remains unaffected thereby.
200
WHEREFORE, the decision of the court a quo is
AFFIRMED with MODIFICATION in that appellant
Danilo Catubig y Horio is found guilty only of
simple rape and not in its qualified form, and he is
hereby sentenced to suffer the penalty of reclusion
perpetua and to pay complainant Dannilyn Catubig
P50,000.00 civil indemnity, P50,000.00 moral
damages and P25,000.00 exemplary damages.
Costs de oficio.
SO ORDERED.
Davide, Jr., C .J ., Bellosillo, Melo, Kapunan,
Mendoza, Panganiban, Quisumbing, Pardo,
Buena, Gonzaga-Reyes, Ynares-Santiago, De
Leon, Jr. and Sandoval-Gutierrez, JJ ., concur.
Puno, J ., concurs in the result.
SECOND DIVISION
G.R. No. 138060 September 1, 2004
WILLIAM TIU, doing business under the name
and style of "D’ Rough Riders," and VIRGILIO
TE LAS PIÑASpetitioners,
vs.
PEDRO A. ARRIESGADO, BENJAMIN
CONDOR, SERGIO PEDRANO and PHILIPPINE
PHOENIX SURETY AND INSURANCE,
INC., respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule
45 of the Rules of Court from the Decision1 of the
Court of Appeals in CA-G.R. CV No. 54354
affirming with modification the Decision2 of the
Regional Trial Court, 7th Judicial Region, Cebu
City, Branch 20, in Civil Case No. CEB-5963 for
breach of contract of carriage, damages and
attorney’s fees, and the Resolution dated February
26, 1999 denying the motion for reconsideration
thereof.
The following facts are undisputed:
At about 10:00 p.m. of March 15, 1987, the
cargo truck marked "Condor Hollow Blocks
and General Merchandise" bearing plate
number GBP-675 was loaded with
firewood in Bogo, Cebu and left for Cebu
City. Upon reaching Sitio Aggies,
Poblacion, Compostela, Cebu, just as the
truck passed over a bridge, one of its rear
tires exploded. The driver, Sergio
Pedrano, then parked along the right side
of the national highway and removed the
damaged tire to have it vulcanized at a
nearby shop, about 700 meters
away.3 Pedrano left his helper, Jose
Mitante, Jr. to keep watch over the stalled
vehicle, and instructed the latter to place a
spare tire six fathoms away4 behind the
stalled truck to serve as a warning for
oncoming vehicles. The truck’s tail lights
were also left on. It was about 12:00 a.m.,
March 16, 1987.
At about 4:45 a.m., D’ Rough Riders passenger
bus with plate number PBP-724 driven by Virgilio
Te Laspiñas was cruising along the national
highway of Sitio Aggies, Poblacion, Compostela,
Cebu. The passenger bus was also bound for
Cebu City, and had come from Maya,
Daanbantayan, Cebu. Among its passengers were
the Spouses Pedro A. Arriesgado and Felisa
Pepito Arriesgado, who were seated at the right
side of the bus, about three (3) or four (4) places
from the front seat.
As the bus was approaching the bridge, Laspiñas
saw the stalled truck, which was then about 25
meters away.5 He applied the breaks and tried to
swerve to the left to avoid hitting the truck. But it
was too late; the bus rammed into the truck’s left
rear. The impact damaged the right side of the bus
and left several passengers injured. Pedro
Arriesgado lost consciousness and suffered a
fracture in his right colles.6 His wife, Felisa, was
brought to the Danao City Hospital. She was later
transferred to the Southern Island Medical Center
where she died shortly thereafter.7
Respondent Pedro A. Arriesgado then filed a
complaint for breach of contract of carriage,
damages and attorney’s fees before the Regional
Trial Court of Cebu City, Branch 20, against the
petitioners, D’ Rough Riders bus operator William
Tiu and his driver, Virgilio Te Laspiñas on May 27,
1987. The respondent alleged that the passenger
bus in question was cruising at a fast and high
speed along the national road, and that petitioner
Laspiñas did not take precautionary measures to
avoid the accident.8 Thus:
6. That the accident resulted to the death
of the plaintiff’s wife, Felisa Pepito
201
 Arriesgado, as evidenced by a Certificate
of Death, a xerox copy of which is hereto
attached as integral part hereof and
marked as ANNEX – "A", and physical
injuries to several of its passengers,
including plaintiff himself who suffered a
"COLLES FRACTURE RIGHT," per
Medical Certificate, a xerox copy of which
is hereto attached as integral part hereof
and marked as ANNEX – "B" hereof.
7. That due to the reckless and imprudent
driving by defendant Virgilio Te Laspiñas
of the said Rough Riders passenger bus,
plaintiff and his wife, Felisa Pepito
Arriesgado, failed to safely reach their
destination which was Cebu City, the
proximate cause of which was defendant-
driver’s failure to observe utmost diligence
required of a very cautious person under
all circumstances.
8. That defendant William Tiu, being the
owner and operator of the said Rough
Riders passenger bus which figured in the
said accident, wherein plaintiff and his wife
were riding at the time of the accident, is
therefore directly liable for the breach of
contract of carriage for his failure to
transport plaintiff and his wife safely to
their place of destination which was Cebu
City, and which failure in his obligation to
transport safely his passengers was due to
and in consequence of his failure to
exercise the diligence of a good father of
the family in the selection and supervision
of his employees, particularly defendant-
driver Virgilio Te Laspiñas.9
The respondent prayed that judgment be rendered
in his favor and that the petitioners be condemned
to pay the following damages:
1). To pay to plaintiff, jointly and severally,
the amount of ₱30,000.00 for the death
and untimely demise of plaintiff’s wife,
Felisa Pepito Arriesgado;
2). To pay to plaintiff, jointly and severally,
the amount of ₱38,441.50, representing
actual expenses incurred by the plaintiff in
connection with the death/burial of
plaintiff’s wife;
3). To pay to plaintiff, jointly and severally,
the amount of ₱1,113.80, representing
medical/hospitalization expenses incurred
by plaintiff for the injuries sustained by him;
4). To pay to plaintiff, jointly and severally,
the amount of ₱50,000.00 for moral
damages;
5). To pay to plaintiff, jointly and severally,
the amount of ₱50,000.00 by way of
exemplary damages;
6). To pay to plaintiff, jointly and severally,
the amount of ₱20,000.00 for attorney’s
fees;
7). To pay to plaintiff, jointly and severally,
the amount of ₱5,000.00 for litigation
expenses.
PLAINTIFF FURTHER PRAYS FOR
SUCH OTHER RELIEFS AND
REMEDIES IN LAW AND EQUITY.10
The petitioners, for their part, filed a Third-Party
Complaint11 on August 21, 1987 against the
following: respondent Philippine Phoenix Surety
and Insurance, Inc. (PPSII), petitioner Tiu’s
insurer; respondent Benjamin Condor, the
registered owner of the cargo truck; and
respondent Sergio Pedrano, the driver of the truck.
They alleged that petitioner Laspiñas was
negotiating the uphill climb along the national
highway of Sitio Aggies, Poblacion, Compostela,
in a moderate and normal speed. It was further
alleged that the truck was parked in a slanted
manner, its rear portion almost in the middle of the
highway, and that no early warning device was
displayed. Petitioner Laspiñas promptly applied
the brakes and swerved to the left to avoid hitting
the truck head-on, but despite his efforts to avoid
damage to property and physical injuries on the
passengers, the right side portion of the bus hit the
cargo truck’s left rear. The petitioners further
alleged, thus:
5. That the cargo truck mentioned in the
aforequoted paragraph is owned and
registered in the name of the third-party
defendant Benjamin Condor and was left
unattended by its driver Sergio Pedrano,
one of the third-party defendants, at the
time of the incident;
6. That third-party defendant Sergio
Pedrano, as driver of the cargo truck with
marked (sic) "Condor Hollow Blocks &
General Merchandise," with Plate No.
GBP-675 which was recklessly and
imprudently parked along the national
highway of Compostela, Cebu during the
vehicular accident in question, and third-
202
party defendant Benjamin Condor, as the
registered owner of the cargo truck who
failed to exercise due diligence in the
selection and supervision of third-party
defendant Sergio Pedrano, are jointly and
severally liable to the third-party plaintiffs
for whatever liability that may be adjudged
against said third-party plaintiffs or are
directly liable of (sic) the alleged death of
plaintiff’s wife;
7. That in addition to all that are stated
above and in the answer which are
intended to show reckless imprudence on
the part of the third-party defendants, the
third-party plaintiffs hereby declare that
during the vehicular accident in question,
third-party defendant was clearly violating
Section 34, par. (g) of the Land
Transportation and Traffic Code…
… PESOS (₱50,000.00) as moral
10. That the aforesaid passenger bus,
owned and operated by third-party plaintiff
William Tiu, is covered by a common
carrier liability insurance with Certificate of
Cover No. 054940 issued by Philippine
Phoenix Surety and Insurance, Inc., Cebu
City Branch, in favor of third-party plaintiff
William Tiu which covers the period from
July 22, 1986 to July 22, 1987 and that the
said insurance coverage was valid,
binding and subsisting during the time of
the aforementioned incident (Annex "A" as
part hereof);
11. That after the aforesaid alleged
incident, third-party plaintiff notified third-
party defendant Philippine Phoenix Surety
and Insurance, Inc., of the alleged incident
hereto mentioned, but to no avail;
12. That granting, et arguendo et arguendi,
if herein third-party plaintiffs will be
adversely adjudged, they stand to pay
damages sought by the plaintiff and
therefore could also look up to the
Philippine Phoenix Surety and Insurance,
Inc., for contribution, indemnification
and/or reimbursement of any liability or
obligation that they might [be] adjudged
per insurance coverage duly entered into
by and between third-party plaintiff William
Tiu and third-party defendant Philippine
Phoenix Surety and Insurance, Inc.;…12
The respondent PPSII, for its part, admitted that it
had an existing contract with petitioner Tiu, but
averred that it had already attended to and settled
the claims of those who were injured during the
incident.13 It could not accede to the claim of
respondent Arriesgado, as such claim was way
beyond the scheduled indemnity as contained in
the contract of insurance.14
After the parties presented their respective
evidence, the trial court ruled in favor of
respondent Arriesgado. The dispositive portion of
the decision reads:
WHEREFORE, in view of the foregoing,
judgment is hereby rendered in favor of
plaintiff as against defendant William Tiu
ordering the latter to pay the plaintiff the
following amounts:
1 - The sum of FIFTY THOUSAND
damages;
2 - The sum of FIFTY THOUSAND
PESOS (₱50,000.00) as
exemplary damages;
3 - The sum of THIRTY-EIGHT
THOUSAND FOUR HUNDRED
FORTY-ONE PESOS
(₱38,441.00) as actual damages;
4 - The sum of TWENTY
THOUSAND PESOS
(₱20,000.00) as attorney’s fees;
5 - The sum of FIVE THOUSAND
PESOS (₱5,000.00) as costs of
suit;
SO ORDERED.15
According to the trial court, there was no dispute
that petitioner William Tiu was engaged in
business as a common carrier, in view of his
admission that D’ Rough Rider passenger bus
which figured in the accident was owned by him;
that he had been engaged in the transportation
business for 25 years with a sole proprietorship;
and that he owned 34 buses. The trial court ruled
that if petitioner Laspiñas had not been driving at
a fast pace, he could have easily swerved to the
left to avoid hitting the truck, thus, averting the
unfortunate incident. It then concluded that
petitioner Laspiñas was negligent.
203
The trial court also ruled that the absence of an
early warning device near the place where the
truck was parked was not sufficient to impute
negligence on the part of respondent Pedrano,
since the tail lights of the truck were fully on, and
the vicinity was well lighted by street lamps.16 It
also found that the testimony of petitioner Tiu, that
he based the selection of his driver Laspiñas on
efficiency and in-service training, and that the
latter had been so far an efficient and good driver
for the past six years of his employment, was
insufficient to prove that he observed the diligence
of a good father of a family in the selection and
supervision of his employees.
After the petitioner’s motion for reconsideration of
the said decision was denied, the petitioners
elevated the case to the Court of Appeals on the
following issues:
I WHETHER THIRD PARTY
DEFENDANT SERGIO PEDRANO WAS
RECKLESS AND IMPRUDENT WHEN
HE PARKED THE CARGO TRUCK IN AN
OBLIQUE MANNER;
II WHETHER THE THIRD PARTY
DEFENDANTS ARE JOINTLY AND
SEVERALLY LIABLE DIRECTLY TO
PLAINTIFF-APPELLEE OR TO
DEFENDANTS-APPELLANTS FOR
WHATEVER LIABILITY THAT MAY BE
ADJUDGED TO THE SAID
DEFENDANTS-APPELLANTS;
III WHETHER DEFENDANT-APPELLANT
VIRGILIO TE LASPIÑAS WAS GUILTY
OF GROSS NEGLIGENCE;
IV WHETHER DEFENDANT-APPELLANT
WILLIAM TIU HAD EXERCISED THE
DUE DILIGENCE OF A GOOD FATHER
OF A FAMILY IN THE SELECTION AND
SUPERVISION OF HIS DRIVERS;
V GRANTING FOR THE SAKE OF
ARGUMENT THAT DEFENDANT-
APPELLANT WILLIAM TIU IS LIABLE TO
PLAINTIFF-APPELLEE, WHETHER
THERE IS LEGAL AND FACTUAL BASIS
IN AWARDING EXCESSIVE MORAL
DAMAGES, EX[E]MPLARY DAMAGES,
ATTORNEY’S FEES AND LITIGATION
EXPENSES TO PLAINTIFF-APPELLEE;
VI WHETHER THIRD PARTY
DEFENDANT PHILIPPINE PHOENIX
SURETY AND INSURANCE, INC. IS
LIABLE TO DEFENDANT- APPELLANT
WILLIAM TIU.17
The appellate court rendered judgment affirming
the trial court’s decision with the modification that
the awards for moral and exemplary damages
were reduced to ₱25,000. The dispositive portion
reads:
WHEREFORE, the appealed Decision
dated November 6, 1995 is hereby
MODIFIED such that the awards for moral
and exemplary damages are each
reduced to ₱25,000.00 or a total of
₱50,000.00 for both. The judgment is
AFFIRMED in all other respects.
SO ORDERED.18
According to the appellate court, the action of
respondent Arriesgado was based not on quasi-
delict but on breach of contract of carriage. As a
common carrier, it was incumbent upon petitioner
Tiu to prove that extraordinary diligence was
observed in ensuring the safety of passengers
during transportation. Since the latter failed to do
so, he should be held liable for respondent
Arriesgado’s claim. The CA also ruled that no
evidence was presented against the respondent
PPSII, and as such, it could not be held liable for
respondent Arriesgado’s claim, nor for
contribution, indemnification and/or
reimbursement in case the petitioners were
adjudged liable.
The petitioners now come to this Court and ascribe
the following errors committed by the appellate
court:
I. THE HONORABLE COURT OF
APPEALS ERRED IN NOT DECLARING
RESPONDENTS BENJAMIN CONDOR
AND SERGIO PEDRANO GUILTY OF
NEGLIGENCE AND HENCE, LIABLE TO
RESPONDENT PEDRO A.
ARRIESGADO OR TO PETITIONERS
FOR WHATEVER LIABILITY THAT MAY
BE ADJUDGED AGAINST THEM.
II. THE HONORABLE COURT OF
APPEALS ERRED IN FINDING
PETITIONERS GUILTY OF
NEGLIGENCE AND HENCE, LIABLE TO
RESPONDENT PEDRO A.
ARRIESGADO.
III. THE HONORABLE COURT OF
APPEALS ERRED IN FINDING
204
 PETITIONER WILLIAM TIU LIABLE FOR
EXEMPLARY DAMAGES, ATTORNEY’S
FEES AND LITIGATION EXPENSES.
IV. THE HONORABLE COURT OF
APPEALS ERRED IN NOT FINDING
RESPONDENT PHILIPPINE PHOENIX
SURETY AND INSURANCE, INC. LIABLE
TO RESPONDENT PEDRO A.
ARRIESGADO OR TO PETITIONER
WILLIAM TIU.19
According to the petitioners, the appellate court
erred in failing to appreciate the absence of an
early warning device and/or built-in reflectors at
the front and back of the cargo truck, in clear
violation of Section 34, par. (g) of the Land
Transportation and Traffic Code. They aver that
such violation is only a proof of respondent
Pedrano’s negligence, as provided under Article
2185 of the New Civil Code. They also question
the appellate court’s failure to take into account
that the truck was parked in an oblique manner, its
rear portion almost at the center of the road. As
such, the proximate cause of the incident was the
gross recklessness and imprudence of respondent
Pedrano, creating the presumption of negligence
on the part of respondent Condor in supervising
his employees, which presumption was not
rebutted. The petitioners then contend that
respondents Condor and Pedrano should be held
jointly and severally liable to respondent
Arriesgado for the payment of the latter’s claim.
The petitioners, likewise, aver that expert evidence
should have been presented to prove that
petitioner Laspiñas was driving at a very fast
speed, and that the CA could not reach such
conclusion by merely considering the damages on
the cargo truck. It was also pointed out that
petitioner Tiu presented evidence that he had
exercised the diligence of a good father of a family
in the selection and supervision of his drivers.
The petitioners further allege that there is no legal
and factual basis to require petitioner Tiu to pay
exemplary damages as no evidence was
presented to show that the latter acted in a
fraudulent, reckless and oppressive manner, or
that he had an active participation in the negligent
act of petitioner Laspiñas.
Finally, the petitioners contend that respondent
PPSII admitted in its answer that while it had
attended to and settled the claims of the other
injured passengers, respondent Arriesgado’s
claim remained unsettled as it was beyond the
scheduled indemnity under the insurance contract.
The petitioners argue that said respondent PPSII
should have settled the said claim in accordance
with the scheduled indemnity instead of just
denying the same.
On the other hand, respondent Arriesgado argues
that two of the issues raised by the petitioners
involved questions of fact, not reviewable by the
Supreme Court: the finding of negligence on the
part of the petitioners and their liability to him; and
the award of exemplary damages, attorney’s fees
and litigation expenses in his favor. Invoking the
principle of equity and justice, respondent
Arriesgado pointed out that if there was an error to
be reviewed in the CA decision, it should be
geared towards the restoration of the moral and
exemplary damages to ₱50,000 each, or a total of
₱100,000 which was reduced by the Court of
Appeals to ₱25,000 each, or a total of only
₱50,000.
Respondent Arriesgado also alleged that
respondents Condor and Pedrano, and
respondent Phoenix Surety, are parties with whom
he had no contract of carriage, and had no cause
of action against. It was pointed out that only the
petitioners needed to be sued, as driver and
operator of the ill-fated bus, on account of their
failure to bring the Arriesgado Spouses to their
place of destination as agreed upon in the contract
of carriage, using the utmost diligence of very
cautious persons with due regard for all
circumstances.
Respondents Condor and Pedrano point out that,
as correctly ruled by the Court of Appeals, the
proximate cause of the unfortunate incident was
the fast speed at which petitioner Laspiñas was
driving the bus owned by petitioner Tiu. According
to the respondents, the allegation that the truck
was not equipped with an early warning device
could not in any way have prevented the incident
from happening. It was also pointed out that
respondent Condor had always exercised the due
diligence required in the selection and supervision
of his employees, and that he was not a party to
the contract of carriage between the petitioners
and respondent Arriesgado.
Respondent PPSII, for its part, alleges that
contrary to the allegation of petitioner Tiu, it settled
all the claims of those injured in accordance with
the insurance contract. It further avers that it did
not deny respondent Arriesgado’s claim, and
emphasizes that its liability should be within the
scheduled limits of indemnity under the said
contract. The respondent concludes that while it is
true that insurance contracts are contracts of
205
indemnity, the measure of the insurer’s liability is
determined by the insured’s compliance with the
terms thereof.
The Court’s Ruling
At the outset, it must be stressed that this Court is
not a trier of facts.20 Factual findings of the Court
of Appeals are final and may not be reviewed on
appeal by this Court, except when the lower court
and the CA arrived at diverse factual
findings.21 The petitioners in this case assail the
finding of both the trial and the appellate courts
that petitioner Laspiñas was driving at a very fast
speed before the bus owned by petitioner Tiu
collided with respondent Condor’s stalled truck.
This is clearly one of fact, not reviewable by the
Court in a petition for review under Rule 45.22
On this ground alone, the petition is destined to
fail.
However, considering that novel questions of law
are likewise involved, the Court resolves to
examine and rule on the merits of the case.
Petitioner Laspiñas was negligent in driving
the Ill-fated bus
In his testimony before the trial court, petitioner
Laspiñas claimed that he was traversing the two-
lane road at Compostela, Cebu at a speed of only
forty (40) to fifty (50) kilometers per hour before the
incident occurred.23 He also admitted that he saw
the truck which was parked in an "oblique position"
at about 25 meters before impact,24and tried to
avoid hitting it by swerving to the left. However,
even in the absence of expert evidence, the
damage sustained by the truck25 itself supports the
finding of both the trial court and the appellate
court, that the D’ Rough Rider bus driven by
petitioner Laspiñas was traveling at a fast pace.
Since he saw the stalled truck at a distance of 25
meters, petitioner Laspiñas had more than enough
time to swerve to his left to avoid hitting it; that is,
if the speed of the bus was only 40 to 50 kilometers
per hour as he claimed. As found by the Court of
Appeals, it is easier to believe that petitioner
Laspiñas was driving at a very fast speed, since at
4:45 a.m., the hour of the accident, there were no
oncoming vehicles at the opposite direction.
Petitioner Laspiñas could have swerved to the left
lane with proper clearance, and, thus, could have
avoided the truck.26 Instinct, at the very least,
would have prompted him to apply the breaks to
avert the impending disaster which he must have
foreseen when he caught sight of the stalled truck.
As we had occasion to reiterate:
A man must use common sense, and
exercise due reflection in all his acts; it is
his duty to be cautious, careful and
prudent, if not from instinct, then through
fear of recurring punishment. He is
responsible for such results as anyone
might foresee and for acts which no one
would have performed except through
culpable abandon. Otherwise, his own
person, rights and property, and those of
his fellow beings, would ever be exposed
to all manner of danger and injury.27
We agree with the following findings of the trial
court, which were affirmed by the CA on appeal:
A close study and evaluation of the
testimonies and the documentary proofs
submitted by the parties which have direct
bearing on the issue of negligence, this
Court as shown by preponderance of
evidence that defendant Virgilio Te
Laspiñas failed to observe extraordinary
diligence as a driver of the common carrier
in this case. It is quite hard to accept his
version of the incident that he did not see
at a reasonable distance ahead the cargo
truck that was parked when the Rough
Rider [Bus] just came out of the bridge
which is on an (sic) [more] elevated
position than the place where the cargo
truck was parked. With its headlights fully
on, defendant driver of the Rough Rider
was in a vantage position to see the cargo
truck ahead which was parked and he
could just easily have avoided hitting and
bumping the same by maneuvering to the
left without hitting the said cargo truck.
Besides, it is (sic) shown that there was
still much room or space for the Rough
Rider to pass at the left lane of the said
national highway even if the cargo truck
had occupied the entire right lane thereof.
It is not true that if the Rough Rider would
proceed to pass through the left lane it
would fall into a canal considering that
there was much space for it to pass without
hitting and bumping the cargo truck at the
left lane of said national highway. The
records, further, showed that there was no
incoming vehicle at the opposite lane of
the national highway which would have
prevented the Rough Rider from not
swerving to its left in order to avoid hitting
and bumping the parked cargo truck. But
the evidence showed that the Rough Rider
instead of swerving to the still spacious left
lane of the national highway plowed
directly into the parked cargo truck hitting
206
 the latter at its rear portion; and thus, the
(sic) causing damages not only to herein
plaintiff but to the cargo truck as well.28
Indeed, petitioner Laspiñas’ negligence in driving
the bus is apparent in the records. By his own
admission, he had just passed a bridge and was
traversing the highway of Compostela, Cebu at a
speed of 40 to 50 kilometers per hour before the
collision occurred. The maximum speed allowed
by law on a bridge is only 30 kilometers per
hour.29And, as correctly pointed out by the trial
court, petitioner Laspiñas also violated Section 35
of the Land Transportation and Traffic Code,
Republic Act No. 4136, as amended: 1avv phil.net
Sec. 35. Restriction as to speed. – (a) Any
person driving a motor vehicle on a
highway shall drive the same at a careful
and prudent speed, not greater nor less
than is reasonable and proper, having due
regard for the traffic, the width of the
highway, and or any other condition then
and there existing; and no person shall
drive any motor vehicle upon a highway at
such speed as to endanger the life, limb
and property of any person, nor at a speed
greater than will permit him to bring the
vehicle to a stop within the assured clear
distance ahead.30
Under Article 2185 of the Civil Code, a person
driving a vehicle is presumed negligent if at the
time of the mishap, he was violating any traffic
regulation.31
Petitioner Tiu failed to overcome the
presumption of negligence against him as one
engaged in the business of common carriage
The rules which common carriers should observe
as to the safety of their passengers are set forth in
the Civil Code, Articles 1733,32 175533 and
1756.34 In this case, respondent Arriesgado and
his deceased wife contracted with petitioner Tiu,
as owner and operator of D’ Rough Riders bus
service, for transportation from Maya,
Daanbantayan, Cebu, to Cebu City for the price of
₱18.00.35 It is undisputed that the respondent and
his wife were not safely transported to the
destination agreed upon. In actions for breach of
contract, only the existence of such contract, and
the fact that the obligor, in this case the common
carrier, failed to transport his passenger safely to
his destination are the matters that need to be
proved.36 This is because under the said contract
of carriage, the petitioners assumed the express
obligation to transport the respondent and his wife
to their destination safely and to observe
extraordinary diligence with due regard for all
circumstances.37 Any injury suffered by the
passengers in the course thereof is immediately
attributable to the negligence of the carrier.38 Upon
the happening of the accident, the presumption of
negligence at once arises, and it becomes the duty
of a common carrier to prove that he observed
extraordinary diligence in the care of his
passengers.39 It must be stressed that in requiring
the highest possible degree of diligence from
common carriers and in creating a presumption of
negligence against them, the law compels them to
curb the recklessness of their drivers.40
While evidence may be submitted to overcome
such presumption of negligence, it must be shown
that the carrier observed the required
extraordinary diligence, which means that the
carrier must show the utmost diligence of very
cautious persons as far as human care and
foresight can provide, or that the accident was
caused by fortuitous event.41 As correctly found by
the trial court, petitioner Tiu failed to conclusively
rebut such presumption. The negligence of
petitioner Laspiñas as driver of the passenger bus
is, thus, binding against petitioner Tiu, as the
owner of the passenger bus engaged as a
common carrier.42
The Doctrine of Last Clear Chance Is
Inapplicable in the Case at Bar
Contrary to the petitioner’s contention, the
principle of last clear chance is inapplicable in the
instant case, as it only applies in a suit between
the owners and drivers of two colliding vehicles. It
does not arise where a passenger demands
responsibility from the carrier to enforce its
contractual obligations, for it would be inequitable
to exempt the negligent driver and its owner on the
ground that the other driver was likewise guilty of
negligence.43 The common law notion of last clear
chance permitted courts to grant recovery to a
plaintiff who has also been negligent provided that
the defendant had the last clear chance to avoid
the casualty and failed to do so. Accordingly, it is
difficult to see what role, if any, the common law of
last clear chance doctrine has to play in a
jurisdiction where the common law concept of
contributory negligence as an absolute bar to
recovery by the plaintiff, has itself been rejected,
as it has been in Article 2179 of the Civil Code.44
Thus, petitioner Tiu cannot escape liability for the
death of respondent Arriesgado’s wife due to the
negligence of petitioner Laspiñas, his employee,
on this score.
207
 Respondents Pedrano and Condor were
likewise Negligent
In Phoenix Construction, Inc. v. Intermediate
Appellate Court,45 where therein respondent
Dionisio sustained injuries when his vehicle
rammed against a dump truck parked askew, the
Court ruled that the improper parking of a dump
truck without any warning lights or reflector
devices created an unreasonable risk for anyone
driving within the vicinity, and for having created
such risk, the truck driver must be held
responsible. In ruling against the petitioner therein,
the Court elucidated, thus:
… In our view, Dionisio’s negligence,
although later in point of time than the truck
driver’s negligence, and therefore closer to
the accident, was not an efficient
intervening or independent cause. What
the petitioners describe as an "intervening
cause" was no more than a foreseeable
consequence of the risk created by the
negligent manner in which the truck driver
had parked the dump truck. In other words,
the petitioner truck driver owed a duty to
private respondent Dionisio and others
similarly situated not to impose upon them
the very risk the truck driver had created.
Dionisio’s negligence was not that of an
independent and overpowering nature as
to cut, as it were, the chain of causation in
fact between the improper parking of the
dump truck and the accident, nor to sever
the juris vinculum of liability. …
… had respondent Condor, the owner of the truck,
We hold that private respondent Dionisio’s
negligence was "only contributory," that
the "immediate and proximate cause" of
the injury remained the truck driver’s "lack
of due care."…46
In this case, both the trial and the appellate courts
failed to consider that respondent Pedrano was
also negligent in leaving the truck parked askew
without any warning lights or reflector devices to
alert oncoming vehicles, and that such failure
created the presumption of negligence on the part
of his employer, respondent Condor, in
supervising his employees properly and
adequately. As we ruled in Poblete v. Fabros:47
It is such a firmly established principle, as
to have virtually formed part of the law
itself, that the negligence of the employee
gives rise to the presumption of negligence
on the part of the employer. This is the
presumed negligence in the selection and
supervision of employee. The theory of
presumed negligence, in contrast with the
American doctrine of respondeat superior,
where the negligence of the employee is
conclusively presumed to be the
negligence of the employer, is clearly
deducible from the last paragraph of
Article 2180 of the Civil Code which
provides that the responsibility therein
mentioned shall cease if the employers
prove that they observed all the diligence
of a good father of a family to prevent
damages. …48
The petitioners were correct in invoking
respondent Pedrano’s failure to observe Article IV,
Section 34(g) of the Rep. Act No. 4136, which
provides:1avvphil.net
(g) Lights when parked or disabled. –
Appropriate parking lights or flares visible
one hundred meters away shall be
displayed at a corner of the vehicle
whenever such vehicle is parked on
highways or in places that are not well-
lighted or is placed in such manner as to
endanger passing traffic.
The manner in which the truck was parked clearly
endangered oncoming traffic on both sides,
considering that the tire blowout which stalled the
truck in the first place occurred in the wee hours of
the morning. The Court can only now surmise that
the unfortunate incident could have been averted
equipped the said vehicle with lights, flares, or, at
the very least, an early warning device.49 Hence,
we cannot subscribe to respondents Condor and
Pedrano’s claim that they should be absolved from
liability because, as found by the trial and appellate
courts, the proximate cause of the collision was the
fast speed at which petitioner Laspiñas drove the
bus. To accept this proposition would be to come
too close to wiping out the fundamental principle of
law that a man must respond for the foreseeable
consequences of his own negligent act or
omission. Indeed, our law on quasi-delicts seeks
to reduce the risks and burdens of living in society
and to allocate them among its members. To
accept this proposition would be to weaken the
very bonds of society.50
The Liability of Respondent PPSII as Insurer
The trial court in this case did not rule on the
liability of respondent PPSII, while the appellate
208
court ruled that, as no evidence was presented In fact, respondent PPSII did not dispute the
against it, the insurance company is not liable. existence of such contract, and admitted that it
was liable thereon. It claimed, however, that it had
A perusal of the records will show that when the attended to and settled the claims of those injured
petitioners filed the Third-Party Complaint against during the incident, and set up the following as
respondent PPSII, they failed to attach a copy of special affirmative defenses:
the terms of the insurance contract itself. Only
Certificate of Cover No. 05494051 issued in favor of Third party defendant Philippine Phoenix
"Mr. William Tiu, Lahug, Cebu City" signed by Surety and Insurance, Inc. hereby
Cosme H. Boniel was appended to the third-party reiterates and incorporates by way of
complaint. The date of issuance, July 22, 1986, the reference the preceding paragraphs and
period of insurance, from July 22, 1986 to July 22, further states THAT:-
1987, as well as the following items, were also
indicated therein: 8. It has attended to the claims of
Vincent Canales, Asuncion
SCHEDULED VEHICLE
Batiancila and Neptali Palces who
sustained injuries during the
MOD MAKE TYPE COLOR BLT incident in question. In fact, it
EL Isuzu OF blue mixed FILE settled financially their claims per
Forward BODY NO.
Bus vouchers duly signed by them and
they duly executed Affidavit[s] of
PLAT SERIAL/CHA MOTOR AUTHORI UNLADE Desistance to that effect, xerox
E NO. SSIS NO. NO. ZED N copies of which are hereto
PBP- SER450- 677836 CAPACIT WEIGHT
724 1584124 Y 6 Cyls. attached as Annexes 1, 2, 3, 4, 5,
50 Kgs. and 6 respectively;
SECTION 1/11 *LIMITS OF LIABILITY PREMIU
₱50,000.00 MS PAID 9. With respect to the claim of
A. THIRD PARTY ₱540.005 plaintiff, herein answering third
2
LIABILITY party defendant through its
authorized insurance adjuster
B. PASSENGER Per Per
LIABILITY Person Accident attended to said claim. In fact,
₱12,000 ₱50,000 there were negotiations to that
.00 effect. Only that it cannot accede
to the demand of said claimant
In its Answer53 to the Third-Party Complaint, the considering that the claim was way
respondent PPSII admitted the existence of the beyond the scheduled indemnity
contract of insurance, in view of its failure to as per contract entered into with
specifically deny the same as required under then third party plaintiff William Tiu and
Section 8(a), Rule 8 of the Rules of Court,54 which third party defendant (Philippine
reads: Phoenix Surety and Insurance,
Inc.). Third party Plaintiff William
Tiu knew all along the limitation as
Sec. 8. How to contest genuineness of earlier stated, he being an old
such documents. When an action or hand in the transportation
defense is founded upon a written business;55…
instrument copied in or attached to the
corresponding pleading as provided in the
preceding section, the genuineness and Considering the admissions made by respondent
due execution of the instrument shall be PPSII, the existence of the insurance contract and
deemed admitted unless the adverse the salient terms thereof cannot be dispatched. It
party, under oath, specifically denies them, must be noted that after filing its answer,
and sets forth what he claims to be the respondent PPSII no longer objected to the
facts; but the requirement of an oath does presentation of evidence by respondent
not apply when the adverse party does not Arriesgado and the insured petitioner Tiu. Even in
appear to be a party to the instrument or its Memorandum56 before the Court, respondent
when compliance with an order for PPSII admitted the existence of the contract, but
inspection of the original instrument is averred as follows:
refused.

209
 Petitioner Tiu is insisting that PPSII is
liable to him for contribution,
indemnification and/or reimbursement.
This has no basis under the contract.
Under the contract, PPSII will pay all sums
necessary to discharge liability of the
insured subject to the limits of liability but
not to exceed the limits of liability as so
stated in the contract. Also, it is stated in
the contract that in the event of accident
involving indemnity to more than one
person, the limits of liability shall not
exceed the aggregate amount so specified
by law to all persons to be indemnified.57
As can be gleaned from the Certificate of Cover,
such insurance contract was issued pursuant to
the Compulsory Motor Vehicle Liability Insurance
Law. It was expressly provided therein that the limit
of the insurer’s liability for each person was
₱12,000, while the limit per accident was pegged
at ₱50,000. An insurer in an indemnity contract for
third party liability is directly liable to the injured
party up to the extent specified in the agreement
but it cannot be held solidarily liable beyond that
amount.58 The respondent PPSII could not then
just deny petitioner Tiu’s claim; it should have paid
₱12,000 for the death of Felisa Arriesgado,59 and
respondent Arriesgado’s hospitalization expenses
of ₱1,113.80, which the trial court found to have
been duly supported by receipts. The total amount
of the claims, even when added to that of the other
injured passengers which the respondent PPSII
claimed to have settled,60 would not exceed the
₱50,000 limit under the insurance agreement.
Indeed, the nature of Compulsory Motor Vehicle
Liability Insurance is such that it is primarily
intended to provide compensation for the death or
bodily injuries suffered by innocent third parties or
passengers as a result of the negligent operation
and use of motor vehicles. The victims and/or their
dependents are assured of immediate financial
assistance, regardless of the financial capacity of
motor vehicle owners.61 As the Court, speaking
through Associate Justice Leonardo A.
Quisumbing, explained in Government Service
Insurance System v. Court of Appeals:62
However, although the victim may proceed
directly against the insurer for indemnity,
the third party liability is only up to the
extent of the insurance policy and those
required by law. While it is true that where
the insurance contract provides for
indemnity against liability to third persons,
and such persons can directly sue the
insurer, the direct liability of the insurer
under indemnity contracts against third
party liability does not mean that the
insurer can be held liable in solidum with
the insured and/or the other parties found
at fault. For the liability of the insurer is
based on contract; that of the insured
carrier or vehicle owner is based on tort. …
Obviously, the insurer could be held liable
only up to the extent of what was provided
for by the contract of insurance, in
accordance with the CMVLI law. At the
time of the incident, the schedule of
indemnities for death and bodily injuries,
professional fees and other charges
payable under a CMVLI coverage was
provided for under the Insurance
Memorandum Circular (IMC) No. 5-78
which was approved on November 10,
1978. As therein provided, the maximum
indemnity for death was twelve thousand
(₱12,000.00) pesos per victim. The
schedules for medical expenses were also
provided by said IMC, specifically in
paragraphs (C) to (G).63
Damages to be Awarded
The trial court correctly awarded moral damages
in the amount of ₱50,000 in favor of respondent
Arriesgado. The award of exemplary damages by
way of example or correction of the public
good,64 is likewise in order. As the Court
ratiocinated in Kapalaran Bus Line v. Coronado:65
…While the immediate beneficiaries of the
standard of extraordinary diligence are, of
course, the passengers and owners of
cargo carried by a common carrier, they
are not the only persons that the law seeks
to benefit. For if common carriers carefully
observed the statutory standard of
extraordinary diligence in respect of their
own passengers, they cannot help but
simultaneously benefit pedestrians and
the passengers of other vehicles who are
equally entitled to the safe and convenient
use of our roads and highways. The law
seeks to stop and prevent the slaughter
and maiming of people (whether
passengers or not) on our highways and
buses, the very size and power of which
seem to inflame the minds of their drivers.
Article 2231 of the Civil Code explicitly
authorizes the imposition of exemplary
damages in cases of quasi-delicts "if the
defendant acted with gross
negligence."…66
210
The respondent Pedro A. Arriesgado, as the
surviving spouse and heir of Felisa Arriesgado, is
entitled to indemnity in the amount of
₱50,000.00.67
The petitioners, as well as the respondents
Benjamin Condor and Sergio Pedrano are jointly
and severally liable for said amount, conformably
with the following pronouncement of the Court in
Fabre, Jr. vs. Court of Appeals:68
The same rule of liability was applied in
situations where the negligence of the
driver of the bus on which plaintiff was
riding concurred with the negligence of a
third party who was the driver of another
vehicle, thus causing an accident. In
Anuran v. Buño, Batangas Laguna
Tayabas Bus Co. v. Intermediate
Appellate Court, and Metro Manila Transit
Corporation v. Court of Appeals, the bus
company, its driver, the operator of the
other vehicle and the driver of the vehicle
were jointly and severally held liable to the
injured passenger or the latter’s heirs. The
basis of this allocation of liability was
explained in Viluan v. Court of Appeals,
thus:
"Nor should it make difference that
the liability of petitioner [bus
owner] springs from contract while
that of respondents [owner and
driver of other vehicle] arises from
quasi-delict. As early as 1913, we
already ruled in Gutierrez vs.
Gutierrez, 56 Phil. 177, that in case
of injury to a passenger due to the
negligence of the driver of the bus
on which he was riding and of the
driver of another vehicle, the
drivers as well as the owners of the
two vehicles are jointly and
severally liable for damages.
Some members of the Court,
though, are of the view that under
the circumstances they are liable
on quasi-delict."69
IN LIGHT OF ALL THE FOREGOING, the petition
is PARTIALLY GRANTED.The Decision of the
Court of Appeals is
AFFIRMED with MODIFICATIONS:
(1) Respondent Philippine Phoenix Surety and
Insurance, Inc. and petitioner William Tiu are
ORDERED to pay, jointly and severally,
respondent Pedro A. Arriesgado the total amount
of ₱13,113.80;
(2) The petitioners and the respondents Benjamin
Condor and Sergio Pedrano are ORDERED to
pay, jointly and severally, respondent Pedro A.
Arriesgado ₱50,000.00 as indemnity; ₱26,441.50
as actual damages; ₱50,000.00 as moral
damages; ₱50,000.00 as exemplary damages;
and ₱20,000.00 as attorney’s fees.
SO ORDERED.
Puno*, Austria-Martinez**, Tinga, and Chico-
Nazario, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-21151 June 26, 1968
LOURDES MUNSAYAC, petitioner,
vs.
BENEDICTA DE LARA and THE COURT OF
APPEALS, respondents.
Celso P. Mariano for petitioner.
Ruben L. Roxas for respondents.
MAKALINTAL, J.:
As a result of injuries suffered by the plaintiff-
appellee while riding as a passenger on a jeepney
owned and operated by the defendant-appellant,
this action for recovery of damages was filed in the
Court of First Instance of Rizal (Pasig Branch). The
trial Judge found the driver recklessly negligent: he
drove at an excessive speed, unmindful of the fact
that the road was under repair and heedless of the
passengers' pleas that he go more slowly. Besides
the award of compensatory damages for actual
expenses incurred and loss of income, the
defendant was ordered to pay P1,000.00 as
exemplary damages and P500.00 as attorney's
fees. On these last two items the defendant
appealed to the Court of Appeals, which rendered
a judgment of affirmance, quoting the trial Court's
justification for the award as follows:
The defendant's admission that the
accident happened and the plaintiff's
extensive injuries as a result thereof,
despite which the defendant failed, or even
refused, to placate the sufferings of
211
 plaintiff, necessitating the filing of this
action, entitled plaintiff to exemplary
damages — to set an example to others —
and attorney's fees.
The case is new before us on review by certiorari.
The Civil Code provides that "exemplary or
corrective damages are imposed, by way of
example or correction for the public good" (Act
2229); and that in contracts "the Court may award
exemplary damages if the defendant acted in
wanton, fraudulent, reckless, oppressive or
malevolent manner" (Art. 2232).
Appellant points out that the act referred to in
Article 2232 must be one which is coetaneous with
and characterizes the breach of the contract on
which the suit is based, and not one which is
subsequent to such breach and therefore has no
causal relation thereto, such as the herein
defendant's failure to placate the sufferings of the
plaintiff.
Appellant relies on the case of Rotea vs. Halili,
G.R. No. L-12030, September 30, 1960, where
this Court held:
According to the rule adopted by many
courts, a principal or master can be held
liable for exemplary or punitive damages
based upon the wrongful act of his agent
or servant only where he participated in the
doing of such wrongful act or has
previously authorized or subsequently
ratified it with full knowledge of the facts.
Reasons given for this rule are that since
damages are penal in character, the
motive authorizing their infliction will not be
imputed by presumption to the principal
when the act is committed by an agent or
servant, and that since they are awarded
not by way of compensation, but as a
warning to others, they can only be
awarded against one who has participated
in the offense, and the principal therefore
cannot be held liable for them merely by
reason of wanton, oppressive or malicious
intent on the part of the agent (15 Art. Jur.
730).
We believe the point of the appellant is well-taken.
It is difficult to conceive how the defendant in a
breach of contract case could be held to have
acted in a wanton, fraudulent, reckless, oppressive
or violent manner within the meaning of Article
2232 for something he did or did not do after the
breach, which had no causal connection therewith.
The law does not contemplate a vicarious liability
on his part: the breach is his as party to the
contract, and so if he is to be held liable at all for
exemplary damages by reason of the wrongful act
of his agent, it must be shown that he had
previously authorized or knowingly ratified it
thereafter, in effect making him a co-participant.
From the decision under review, however, there is
nothing to show previous authority or subsequent
ratification by appellant insofar as the
recklessness of the driver was concerned. The
mere statement that the defendant failed, even
refused, to placate the suffering of the plaintiff,
necessitating the filing of the action, is too tenuous
a basis to warrant the conclusion that the
defendant approved of the wrongful act of his
servant with full knowledge of the facts.
It is not enough to say that an example should be
made, or corrective measures employed, for the
public good, especially in accident cases where
public carriers are involved. For the causative
negligence in such cases is personal to the
employees actually in charge of the vehicles, and
it is they who should be made to pay this kind of
damages by way of example or correction, unless
by the demonstrated tolerance or approval of the
owners they themselves can be held at fault and
their fault is of the character described in Article
2232 of the Civil Code. Otherwise there would be
practically no difference between their liability for
exemplary damages and their liability for
compensatory damages, which needs no proof of
their negligence since the suit is predicated on
breach of contract and due diligence on their part
does not constitute a defense.
IN VIEW OF THE FOREGOING, the judgment
appealed from is modified by eliminating the award
for exemplary damages, and affirmed with respect
to the attorney's fees. No pronouncement as to
costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar,
Sanchez, Castro, Angeles and Fernando, JJ.,
concur.
FIRST DIVISION
[G.R. No. 139268. September 3, 2002]
PHILIPPINE TELEGRAPH & TELEPHONE
CORPORATION and LOUIE
CABALIT, petitioners,
vs.
HON. COURT OF APPEALS and LOLITA SIPE
ESCARA, respondents.
212
 DECISION
VITUG, J.:
Assailed in the instant petition of the
Philippine Telegraph & Telephone Corporation
(PT&T) and Louie Cabalit is the judgment of the
Court of Appeals in CA G.R. CV No. 48313,
promulgated on 15 March 1999, which has
affirmed with modification the decision of the
Regional Trial Court of Makati awarding damages
to respondent Lolita Sipe Escara.
The facts were synthesized by the appellate
court in its decision under review.
On July 13, 1990, Felicitas B. Sipe, a resident of
Surralah, South Cotabato, remitted to her sister-in-
law, Lolita Sipe Escara, two telegraphic money
orders through the facilities of Philippine
Telegraph and Telephone Company (PT&T, for
brevity). The money orders, one for P2,000.00 and
the other for P1,000.00, originated from Marbel,
South Cotabato, and were transmitted to the
Cubao branch of PT&T.Plaintiff was then studying
for a doctoral degree in Education at the University
of the Philippines (U.P., for brevity), Diliman,
Quezon City and was residing in one of its
dormitories, the Ipil Residence Hall.According to
the plaintiff, the money was sent for the purpose of
paying for her tuition fee for one semester at the
U.P.; paying for her fare to go back to Cotabato to
enable her to complete the requirements for a job
promotion; and paying for the cost of the medical
consultation of her son who is sick of diabetes.
On July 22, 1990, plaintiffs husband sent her a
telegram advising her to inform him if she has
received a remittance of P3,000.00. She made
several phone calls to PT&T to inquire about the
money but was told that no money was transmitted
in her favor. On August 10, 1990, plaintiff sent her
husband a telegram to inform him of her non-
receipt of the money. On August 18, 1990,
plaintiffs husband again sent her a telegram
instructing her to claim at the PT&T Cubao branch
the money transmitted on July 13, 1990.
On August 20, 1990, plaintiff went to the PT&T
office to inquire about the remittance in her
favor. Since Louie Cabalit, the branch cashier,
was not around, plaintiff was constrained to return
the next day. It was only in the afternoon of August
21, 1990, that she was able to talk to Louie Cabalit
about the remittance. Cabalit looked into his
records, after which, the branch security guard
informed plaintiff that no money was transmitted to
her. Upon plaintiffs request, Cabalit issued a
certification that no telegraphic money order in
favor of plaintiff was received from Surralah by
PT&T. Nevertheless, Cabalit told her that he would
re-examine his records to determine whether a
remittance was made in her name.
Subsequently, Cabalit informed plaintiff that the
money being claimed by her did not come from
Surralah but from Marbel, South Cotabato. On
August 22, 1990, an attempt was made by PT&T
to deliver the telegraphic money order at plaintiffs
dormitory but she was not around. On September
10, 1990, plaintiff received from PT&T two checks
representing the amount remitted to her. However,
plaintiff was not able to encash the checks at once
because the bank did not have a clearance from
PT&T. Finally, on September 14, 1990, plaintiff
was able to encash the checks.
Aggrieved by the delay in the delivery of the
remittance, plaintiff filed a complaint for damages
against PT&T and Louie Cabalit. In her complaint,
she alleged that the delay was the cause of her
failure to enroll for one semester at the U.P.; to
complete her requirements for a job promotion;
and to bring her son to the doctor for medical
consultation. On November 29, 1994, the lower
court rendered the questioned decision, the
dispositive portion of which reads:
`WHEREFORE, this Court renders judgment in
favor of the plaintiff and against the defendants,
ordering the defendants, jointly and severally, to
pay the plaintiff:
`1. The sum of P100,000.00 in
actual/compensatory damages;
`2. The sum of P50,000 in moral damages;
`3. The sum of P10,000.00 in exemplary damages;
`4. No attorneys fees awarded being a pro bono
publica case; and
`5. To pay costs of suits.[1]
Petitioners appealed the decision of the trial
court to the Court of Appeals. The appellate court
affirmed the decision with modification. Finding to
be inadequate the evidence submitted by
respondent Lolita Sipe Escara to prove pecuniary
loss suffered by her, the Court of Appeals deleted
the award of actual damages. The appellate court,
however, sustained the award of moral and
exemplary damages in favor of private
respondent, ratiocinating thusly:
213
Article 1170 of the Civil Code provides that `those
who in the performance of their obligations are
guilty of fraud, negligence, or delay and those who
in any manner contravene the tenor thereof, are
liable for damages. In the case at bar, appellant
PT&T, for a fee, undertook to send plaintiff two
telegraphic money orders in the sum of
P3,000.00. Appellant, however, failed to deliver
the money to plaintiff immediately after the money
order was transmitted to its Cubao branch. It was
only on September 14, 1990, or almost two months
from transmittal that plaintiff was finally able to
have her money.
We find PT&T negligent when it did not take steps
to ensure the prompt delivery of the money to
plaintiff from the time the checks were issued in
her favor. It is quite clear that PT&T did not act with
any sense of urgency but with indifference and
nonchalance with respect to plaintiffs case. First of
all, after Louie Cabalit endorsed the two checks to
the dispatch section of PT&T and subsequently
took an emergency leave, the personnel at the
Cubao branch did not exert enough effort to effect
the delivery of the money. In fact, the Cubao
branch wired its Marbel branch only on August 3,
1990 to request for the complete address of the
recipient from the sender. Apparently, it took them
eighteen days to realize that the address of the
recipient was insufficient.
Furthermore, the claim of PT&T that it made
several attempts to deliver the money between
July 17, 1990 and August 3, 1990 is open to doubt
because there is no proof showing to what extent
PT&T endeavored to locate the plaintiff. Francisco
Dumlao, administrative officer of the Registrars
Office of U.P., testified that the addressee of letters
or telegrams labeled only as `U.P. Diliman, is
located by referring to the records of currently
enrolled students under the active file or to the
records of its alumni under the inactive file. It
appears that PT&T did not attempt to inquire from
the Registrars Office regarding plaintiffs
whereabouts since it obviously failed to draw the
inference that the University of the Philippines is a
school with facilities that can be of assistance in
locating its own students.[2]
In the instant appeal, petitioners would
strongly urge that the appellate court be reversed
in awarding moral and exemplary damages to
respondent Lolita Escara with the latters failure to
present evidence that she had suffered wounded
feelings, serious anxiety, and mental anguish or
that the act she had ascribed to petitioners was
done in bad faith, or in wanton, fraudulent,
oppressive or malevolent manner. Private
respondent, however, would insist that the clearly
established culpable conduct of petitioners
warranted the award of both moral and exemplary
damages.
There is merit in the petition.
The breach of an obligation because of fraud,
negligence or delay or of a contravention by any
means of the tenor of that obligation does open the
defaulting obligor to possible liability for
damages. The right to those damages and the
extent of their recovery would depend on the kind
and nature of the damages and the manner in
which the injury causing it is brought about.
The Court of Appeals was correct in deleting
the award made by the trial court of actual
damages where proof of pecuniary loss, in an
action based on culpa contractual, is
essential.Finding the evidence to be wanting in
this respect, the appellate court did not err in its
judgment.
In the case of moral damages, recovery is
more an exception rather than the rule. Moral
damages are not punitive in nature but are
designed to compensate and alleviate the physical
suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar harm unjustly
caused to a person. In order that an award of
moral damages can be aptly justified, the claimant
must be able to satisfactorily prove that he has
suffered such damages and that the injury causing
it has sprung from any of the cases listed in
Articles 2219[3] and 2220[4] of the Civil
[5]
Code. Then, too, the damages must be shown to
be the proximate result of a wrongful act or
omission. The claimant must establish the factual
basis of the damages and its causal tie with the
acts of the defendant. In fine, an award of moral
damages would require, firstly, evidence of
besmirched reputation or physical, mental or
psychological suffering sustained by the
claimant; secondly, a culpable act or omission
factually established; thirdly, proof that the
wrongful act or omission of the defendant is the
proximate cause of the damages sustained by the
claimant; and fourthly, that the case is predicated
on any of the instances expressed or envisioned
by Article 2219 and Article 2220 of the Civil
Code. In culpa contractual or breach of contract,
particularly, moral damages may be recovered
when the defendant has acted in bad faith or is
found to be guilty of gross negligence (amounting
to bad faith) or in wanton disregard of his
contractual obligation.[6]
In the case at bar, the appellate court itself did
not see any clear indication of bad faith or gross
negligence amounting to bad faith on the part of
214
petitioners. It would be error to make an award of
moral damages to private respondent merely
because petitioner corporation was unable to
effect immediate delivery of the money sent
through it in two money orders, one for P2,000.00
and the other for P1,000.00. Indeed, it would
appear that the address given by the sender was
merely and vaguely stated to be U.P. Diliman
Quezon City. So, also, when private respondent
went to the office of petitioner PT&T to inquire
about the money order she erroneously mentioned
it to have been sent from Surralah, South
Cotabato. It was only upon verification made by
petitioners that the latter were able to discover that
the money transfers did originate, not, however,
from Surralah, but from Marbel, South
Cotabato. Given all the circumstances found by
the appellate court, the delay of less than two
months in the remittance to private respondent of
the amounts due her could hardly be said as being
constitutive of bad faith or gross negligence
amounting to bad faith.
Neither can the award of exemplary damages
be sustained. Exemplary damages are not
recoverable as a matter of right.[7] Although such
damages need not be proved, plaintiff must first
show that he is entitled to moral, temperate, or
compensatory damages before a court can
favorably consider an award of exemplary
damages.[8] In contracts and quasi-contracts,
specifically, exemplary damages may be justified
if the defendant is shown to have acted in a
wanton, fraudulent, reckless, oppressive, or
malevolent manner.[9] Petitioner corporation might
have been remiss in the prompt delivery of the
sums sent through it to respondent; however, the
Court would be hardput to say that such delay
under the facts obtaining can be described as
being wanton, fraudulent, reckless, or oppressive
in character.
Still, of course, petitioner corporation is not
totally free from liability. It may have had
good reasons, but it has not been able to
overcome thereby its burden to prove a
valid excuse, for the breach of agreement such as
by proving, among other possible legal grounds,
fortuitous event to account for its failure. The
breach would have justified a recovery of actual
damages but, there being no adequate proof of
pecuniary loss found by the appellate court, such
damages cannot be awarded. Neither moral nor
exemplary damages have been justified, as
hereinbefore explained, as to warrant any
recovery thereof. The Court thus is left with two
alternative possibilities an award of temperate or
moderate damages or an award of nominal
damages.
Temperate or moderate damages may only
be given if the court finds that
some pecuniary loss has been suffered but that
its amount cannot, from the nature of the case, be
proved with certainty.[10] The factual findings of the
appellate court that respondent has failed to
establish such pecuniary loss or, if proved, cannot
from their nature be precisely quantified precludes
the application of the rule on temperate or
moderate damages. The result comes down to
only a possible award of nominal
damages. Nominal damages are adjudicated in
order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be
vindicated or recognized and not for the purpose
of indemnifying the plaintiff for any loss suffered by
him.[11] The court may award nominal damages in
every obligation arising from any source
enumerated in article 1157 of the Civil Code or,
generally, in every case where property right is
invaded.
In the instant case, for the violation of the right
of private respondent to receive timely delivery of
the money transmitted through petitioner
corporation an award of nominal damages is
appropriate. An amount of P20,000.00 by way of
nominal damages, considering all that private
respondent has had to go through, is in the Courts
view reasonable and fair.
There is, however, neither enough factual nor
adequate legal basis to hold petitioner Louie
Cabalit, PT&Ts branch cashier, solidarily liable
with petitioner corporation.
WHEREFORE, the instant petition is
GRANTED. The appealed decision is reversed
and set aside and, in its stead, petitioner Philippine
Telegraph & Telephone Corporation is ordered to
pay respondent Lolita Sipe Escara the sum of
P20,000.00 by way of nominal damages. Costs
against petitioner corporation.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-
Santiago, and Carpio, JJ., concur.
215